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Introduction to the $500 billion
youth mobile market
“The future’s already out there, it’s just not evenly distributed” - William
Gibson
If you want to understand youth trends and mobile culture, the Youth Mobile
Handbook is the starting point.
If you’re a mobile professional, involved in research and insights or a youth
marketer, you will benefit from accessing 10 years of our research insights
and knowledge in one handy document.
We’ve compiled easy lists of:
• Statistics
• Key concepts
• Resources
How you can use this information:
• content for your next presentation to the board
• ideas and data to brainstorm with your team members
• links to research reports to acquire for internal strategy and marketing
1
About mobileYouth
mobileYouth is a research advisory firm focused on the youth mobile
market.
We help clients better understand young mobile owners through research
and consultancy. Our annual Mobile Youth Report which is sold into over 80
countries and 300+ clients.
We are a team of digital anthropologists, published authors and research
analysts covering 65 markets. mobileYouth was founded by Graham Brown
and Josh Dhaliwal in 2001 to provide IT, telecoms and media clients with
research on youth mobile culture.
We work with major brands such as Nike, Vodafone and MTV who want to
reach out to the next generation of customers but are uncertain how to do
that and confused as to how to reach them. We work with you to understand
your business model and provide market reports on how the next generation
uses mobile phones and the implications for your business. We provide you
with information on “why” your prospects are using mobile phones the way
they are and help you understand the implications for your business, so that
you can make meaningful decisions on how to connect with these users
now, and also in the future.
2
TABLE OF CONTENTS
Why are youth important to your business? 5
Advertising 14
Apple 17
Buyer Behavior 19
Customer Experience 21
Customer Service 23
Influence 26
Innovation 31
Loyalty 36
Mobile Customers 38
Mobile Data 42
Mobile Messaging 44
Mobile Music 46
Mobile Payments 48
Mobile Video 50
Operator Strategies 52
Prepaid 54
3
Pricing 56
Retail 58
Samsung 61
Smartphones 63
Social Media 67
Tablets 70
Trust 72
Youth Branding 74
Next Step 77
4
Why are youth important to your
business?
Overview
There are 3 reasons why youth need to be on board to keep your brand
relevant – not just in the future but right here today. Before we get started,
here are 3 reports you’ll be interested in to give you the necessary
background info, data and case studies:
3 Recommended Research Reports:
• The mobileYouth Economy: The Hidden Value in Mobile’s Long Tail – a 24
page PDF report which details where the growth markets in mobile are
2013-2017.
• Do Mobile Handset Brands Need to Focus on the Youth Market? – a 25
page PDF outlining the youth business case for mobile handset
manufacturers.
• Do Mobile Operator Brands Need an MVNO or Sub-Brand to Target the
Youth Market? This 17 page research PDF compares branding options for
operators and addresses the key mistakes made when engaging youth.
5
Exploding the Myths
• “Youth are cheap”
• “Gen Y is fickle”
• “Millennials are only good for prepaid“
We hear these words every day and every day we simply point to the
evidence – great brands like Apple and Amazon have successfully built their
businesses on the youth market, so why can’t you?
Defining the Youth Market
According to Wikipedia:
Generation Y, also known as the Millennial Generation, is the
demographic cohort following Generation X. There are no precise dates
for when Generation Y starts and ends. Commentators use beginning
birth dates from the latter 1970s, or from the early 1980s to the early
2000s.
That means we’re dealing with customers from the early teens up until the
threshold of their 30s. That’s a very large market and with it a very wide and
complex set of mobile customers. Trying to categorize these customers as
one blob for analytical convenience is as difficult as using one metric to
measure their value – but that’s what we as an industry do.
Redefining Value
The issue stems from an inherent problem in the mobile industry – the only
measure of value we have of a customer’s worth is their phone bill.
But, what of the student who spends $500 on an iPhone and then puts it on
prepay at $12 a month? The reality is that ARPU is a weak measure of
value and particularly for mobile operators, we need to move from
measuring revenue to measuring value.
• Youth are cheap if we only consider ARPU
• Our measures of value need to evolve from ARPU to lifetime value
6
• Great brands like Apple and Amazon have successfully evolved from
ARPU to lifetime value
Apple: Building a Beachhead on the Student Market
Apple got this right, first building a Beachhead in the student market with its
music offering, iTunes and the iPod. From this vantage point it moved into
the iPhone and the rest, as they say, is history. If Apple had gone after the
high-spending executive customers, it would have been duking it out with
Microsoft on the Redmond’s home turf.
When I went to college, everyone used PC. Only left-handers used Macs.
By the late 90s, all the college kids were using Macs. Now, the same
students are IT managers and heads of departments with their iPads and
iPhones.
• Apple built on its brand Beachhead in the student market
• Apple adopted a long term organic approach to growing the brand
• If Apple had chased high end customers first, it would have lost to
Microsoft
The Harley Effect: What Ages Brands
Nokia and Blackberry didn’t get it right. From 2006-2008 both Nokia and
Blackberry rose to prominence as the leading youth brands not just in their
category but globally. Nokia was ranked as the #1 youth brand in the world.
Blackberry beat Coke as the most respected youth brand in South Africa in
2010, the same year of the soccer world cup (where Coke was a $500m
headline sponsor).
Nokia and Blackberry suffered from what we call the Harley Effect – aging
with your customer base. The average age of the Harley Davidson owner is
now 51. Middle aged folk remember Easy Rider and Dennis Hopper from
their era as the icons of cool. The problem is, that Harley chased the high
end customers rather than reinvest their profit into staying relevant with
youth.
Harley-Davidson Tries to Rejuvenate Its Business
“Its patrons grew older and wealthier, but its efforts to cultivate a large
7
base of female and younger riders have been marginally
successful.” (source: Time Magazine)
Now both brands are suffering the tail end of a slow-motion car-crash, the
basketball feeding through the hose pipe and other analogies. It will take
time, as with aged brands like Levis 501, for these two to rediscover their
roots in the youth market and feed through to relevance once again.
• Short term focus on ARPU seduces brands into focusing on high end
customers
• If you always chase the high end, middle market, your market will age out
of relevance
• Harley Davidson used to be a cutting edge youth brand but now it suffers
from an aging market
The 3 Reasons
The Key to winning the youth market is building a compelling business case
why. Why do we need youth?
If it’s only about ARPU, you’re always going to chase the high end
customers and end up like Harley Davidson.
The challenge here is building a case around long term value, the stuff
which happens off the phone bill. So, here are 3 reasons to help you build
that case:
1.Youth are the High End Customers
Consider the phone bill and youth appear to be cheaper than middle aged
executives. According to The Mobile Youth Report, execs spend marginally
more (10-20%) but are often on contract as opposed to prepaid.
What isn’t factored into this equation is the complete picture:
• Spend on the handset
• Spend on mobile data services and accessories
Our research shows that youth are far more willing to spend on the above
two categories than older customers. In fact, they’re spending significantly
8
more of their disposable income meaning they have more skin in the game,
meaning they place a higher premium on getting in right.
Only 42% of youth rated price as “very important” as a factor in choosing
their handset (the lowest of all age groups according to our research), with
88% citing a good customer experience as key to their purchase decision.
Factors included warranty, durability and reliability.
That means not only do youth cite tangible factors other than price, they
also offer real insight into what drives the market. Price is never a good
indicator of product demand.
Price is overrated by the industry. According to the Mobile Youth Report,
industry execs thought “price” was the #1 reason why people bought
handsets followed by experience at #2. In reality, customers cited these
factors the other way round showing that as an industry, our logic and
understanding of buyer behavior is very basic.
When it becomes about price, you’re in the business of commodity. If
handsets and operators want to know why buy, look beyond the older
customers who tend to mention price and see what youth are saying about
the offers.
Youth propensity to spend on value added services is well documented.
Youth use mobile messaging services 10x more than older peers. But
beyond messaging, youth are spending on music, games, video and apps,
opening up these new markets to further investment with their initial
revenues.
The value of youth should not be confined to the phone bill. This logic limits
you to the mistakes of brands like Nokia, Blackberry and Levis. Think more
like Apple and Amazon and invest in the long term.
• If you consider complete spend (ARPU + handset + off bill services/
products), youth are high end customers
• Youth rate experience over price. Older customers rate price. If you want
to move away from the race-to-the-bottom you have to seek answers in
the youth market
• Youth means investing in the long term. It’s not an either-or situation with
young vs old customers in the same way business should not focus on the
short or the long term. Business needs to focus on both.
9
2.Youth are the Influencers
Gen Y, Millennials and students are the most vocal when it comes to sharing
reviews and information about products with peers. 57% of teenage girls
and 47% of teenage boys share new brands or trends with their friends
(source: The Mobile Youth Report).
What separates the youth and older markets is the youth market’s
propensity to create Earned Media.
A quick 101 on Earned Media from Wikipedia to bring you up to speed:
Earned media (or free media) refers to favorable publicity gained
through promotional efforts other than advertising, as opposed to paid
media, which refers to publicity gained through advertising. Earned
media often refers specifically to publicity gained through editorial
influence, whereas social media refers to publicity gained through
grassroots action, particularly on the Internet.
Earned Media is key to brand success today.
But it’s not just each other they’re influencing. Consider the mother of the
teenager daughter who’s just learned to use WhatsApp thanks to her
daughter installing it on her Samsung Galaxy. Youth tend to be the
educators and introducers of new technologies into families.
Brands are often scared to let youth get hold of their products and start
advocating them but this is the route to the adult market. Of course, it takes
time but Apple has risen to prominence with the highest NPS (net promoter
score) of all handset brands on the back of a highly vocal student population
who grew up with the brand.
• Youth are the most vocal customers
• Youth influence each other and adult customers
• The route to the adult market (long term) is through organic growth in the
youth market
3.Youth Drive Innovation
When parents first bought the iPad, they bought it on the promise of the
educational tool painted by its initial marketing. In reality, it was youth
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(particularly primary school children) who soon co-opted the device and
turned it into a games machine.
Youth often take devices out of the context they were originally intended for
and turn them into something better (Blackberry and BBM are good cases in
point). SMS represents possibly the most significant example of this, given
than SMS was originally designed by industry engineers as a system test
tool. $1 trillion later, youth have demonstrated their ability to turn our
mistakes into successes.
Innovation today is fraught with risk. Consider MMS or Location Based
Services – 2 very expensive mistakes made by the mobile industry. It took
the best part of a decade to see even the smallest upticks in customer
behavior on these two platforms. Only when the industry let go and
customers took control did MMS or LBS become anything of note.
De-risking innovation means allowing youth to take the technology, run with
it and turn it into something useful. Something useful means applicable for
the less-tolerant mass market who want products out of the box. Where
youth will navigate inconsistency, the adult mass market wants everything to
simply work.
Launching products onto the adult mass market is risky, particularly if you
are targeting corporate executives. If you filter it through the youth market
first, you get a better idea of applicable charging models, usage scenarios
and the messages you need to emphasize in your marketing when later
approaching the mass market.
• Youth drive the uptake of new technologies
• Youth today provide a mirror to how the mass market will use technologies
tomorrow
• Investing in the innovation of the youth market today allows you to de-risk
new product launches for the mass market tomorrow
Summary
Great brands are first built in the youth market. If you chase the high end
customers your market will eventually fall off the cliff. You need to be
grounded in both markets – an approach that’s worked effectively for brands
like Apple and Amazon over the last decade.
11
If you want to see how the mass market of tomorrow will be using their
devices, look at how youth are using them today – mobileYouth
12
Youth Statistics
The mobile youth market is worth over $400 bn annually (source: The
Mobile Youth Report)
There are 1.6 billion mobile youth in the world today (aged 5-29) (source:
The Mobile Youth Report). As a standalone country they’d be bigger than
China.
Brands with a strong youth beachhead (e.g. Apple) dominate industry profit
shares (70%) despite having a small global market share (10%) (source:
The Mobile Youth Report)
Youth brands (e.g. Boost Mobile) have grown to become the #1 prepaid
carrier in the US despite the presence of industry leaders like Verizon
Wireless and AT&T (source: The Mobile Youth Report)
Young Fans generate 80% of the brand’s word-of-mouth and the Fans with
the top 20% NPS scores are responsible for 80% of company profits
(source: The Mobile Youth Report)
Youth Resources
• BlackBerry growth depends on youth
• Why should Samsung focus on youth now?
• Youth lead high-end smartphone market but operators need to change to
take advantage of this opportunity
13
Advertising
Advertising Reports
• Download Report Preview: Social Media, Advertising and Influence
• Download Report Preview: Who or What influences youth purchase?
• Download Report Preview: Winning the Hearts and Minds of Young
Customers
Advertising Quotes
“Give them quality. That’s the best kind of advertising” – Milton Hershey
Advertising is a tax on boring products – anon
“It no longer makes economic sense to send an advertising message to the
many in hopes of persuading the few” – Lawrence Light, CMO McDonald’s
“We found advertising works the way the grass grows. You can never see it,
but every week you have to mow the lawn” – Andy Tarshis, A.C.Nielsen
Company
“Nike didn’t discover the power of advertising, they discovered the power of
their own voice” – Dan Wieden
14
Advertising is like sex, only losers pay for it – anon
Advertising Key Concepts
Ad Agencies: An ad agency would much rather spend $1m creating
“active” stuff. E.g. create a cool flash mob (read T-Mobile “Life is for
sharing”) or throw parachute your new youth car out of a plane (read
Chevvy Sonic) than talk about real world stuff like passive communication,
hanging out and everyday interaction. There’s a curious anomaly in
marketing today; ad agencies don’t advertise. When pressed, most will give
you a number of reasons why they don’t need to from being a “business-to-
business” concern to not needing to chase after clients. You wouldn’t take
medical advice from a doctor who smoked, or a financial adviser who was
bankrupt. Why, then, build your brand with a company that doesn’t do for
themselves what they’re doing for your brand? Advertising is a tax on boring
brands. Advertising is a remedy not a business strategy.
Attention Economy: Youth don’t wake up thinking about your brand
anymore. Advertising was born of an era when youth trust and attention
were abundant. That simply isn’t true anymore.
Authenticity: In the post Big-Idea era of marketing, authenticity can no
longer be bought or sold, traded as a commodity by clever advertising
agencies, it must be earned. More importantly, it’s a process that takes time.
Agencies cling to the idea of viral video campaigns that can project a boring
brand into the world of youth authenticity overnight thus bypassing the
necessary groundwork and foundations that often takes years if not decades
to create. Perhaps the root of the problem lies in an industry that exists on a
quarterly basis, where very little space is given to projects that provide long
term structure and authenticity for a brand, favoring instead short, sharp
“hits” that spike youth attention only to die away until the next campaign is
resurrected.
Awareness: Terms like “awareness”, “top of mind” and “market share” are
increasingly no more than vanity metrics for brands that insist on following
them. If customers like you, be afraid, be very afraid. Because, in today’s
attention economy being liked means being invisible.
Content vs Context: The world isn’t as it seems, it’s as we tell it. Physical
form (content) is shaped by meaning (context). Content is the product you
put out in the market – what you make for them. We become easily seduced
by the world of Content, the product, advertising and design agency spin.
15
Content is the value we see. But context is the only value people feel.
Context is the meaning that customers give to your product – what you
make them feel. Consider that word context again. Context: from the latin
“con” – to join, and “textere” – to weave fabric. Context is the fabric. Take
the component threads out of the tapestry they are meaningless but as one
they tell a story.
Earned Media: Earned media (or free media) refers to favorable publicity
gained through promotional efforts other than advertising, as opposed to
paid media (PR, advertising, sponsorship etc) (source: Wikipedia). The core
to youth marketing is Earned Media. Fans drive Earned Media and if you
want an army of vocal Fans you need an active Frontline. This complete
System is measurable through simple metrics like NPS.
Advertising Statistics
39% of youth said their purchase decisions were influenced by TV ads
compared to 94% who said that what their best friends had to say affect
their purchase decision the most (source: The Mobile Youth Report)
70% of youth reported feeling annoyed by ads that interrupt their daily lives
while 44% said that they were unlikely to buy a product after coming across
an ad (source: The Mobile Youth Report)
The average American youth will have seen 120,000 marketing messages
by age 17 (source: Kahnemann)
The human brain gates out 95% of all the information it receives at any one
time (source: Graham D Brown)
Advertising Resources
• Can Samsung beat Apple by spending more on advertising?
• Change Agents: Author Graham Brown reveals who is the real driving
force of mobile innovation
• The Power of the Outlier: Author Graham Brown discusses why Outsiders
are key to innovation
16
Apple
Apple Reports
• Download Report Preview: Generation Tablet
• Download Report Preview: How can Challenger Brands Beat Samsung
and Apple?
• Download Report Preview: How can Samsung beat Apple?
• Download Report Preview: The 15 Brands That Will Define Mobile in 2013
Apple Quotes
“Look at the design of a lot of consumer products — they’re really
complicated surfaces. We tried to make something much more holistic and
simple. When you first start off trying to solve a problem, the first solutions
you come up with are very complex, and most people stop there. But if you
keep going, and live with the problem and peel more layers of the onion off,
you can often times arrive at some very elegant and simple solutions. Most
people just don’t put in the time or energy to get there. We believe that
customers are smart, and want objects which are well thought through.” –
Steve Jobs
17
Apple Statistics
Apple iPhones account for 71% of global smartphone industry profit share
despite making only 10% of global smartphone industry market share
(source: The Mobile Youth Report)
75% prospective smartphone buyers intend to buy an iPhone in the future
because they view the brand as prestigious (source: The Mobile Youth
Report)
85% of current iPhone owners intend to purchase an iPhone when it’s time
to upgrade their contract (source: The Mobile Youth Report)
Apple retail revenue of $6,200 per square foot surpasses revenues from
traditional retailers like Best Buy ($800) and Tiffany ($3,000) (source: The
Mobile Youth Report)
Apple generates 2X more buzz than Samsung in the absence of regular
advertising campaigns (source: The Mobile Youth Report)
Apple Resources
• 5 ways to build a better smartphone experience (without changing the
handset)
• BlackBerry growth depends on youth
• Can Samsung beat Apple by spending more on advertising?
• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience
• The Top 3 Reasons Why Youth Buy Samsung (and why these are not
enough to beat Apple)
• What are Social Tools? Author Graham Brown shares a new way to look
at mobile phones
• Why should Samsung focus on youth now?
• Youth lead high-end smartphone market but operators need to change to
take advantage of this opportunity
18
Buyer Behavior
Buyer Behavior Reports
• Download Report Preview: Price and Handset Purchase Decisions
• Download Report Preview: Who or What influences youth purchase?
Buyer Behavior Quotes
“The essential difference between emotion and reason is that emotion leads
to action, while reason leads to conclusions” – Donald Galne
“People buy on emotion and justify with logic” – Dan Ariely
Buyer Behavior Statistics
83% of youth bought their handsets based on what peers (not what ad
agencies) said about the brand (source: The Mobile Youth Report)
Top emotional factors that affect youth purchase decisions are status (75%),
design (65%) and convenience (58%) (source: The Mobile Youth Report)
74% of youth prefer to visit a store before making a smartphone purchase to
‘try’ and ‘see’ the product (source: The Mobile Youth Report)
19
59% of buyers use their smartphones to check product availability and 35%
check store hours before visiting a retail store (source: The Mobile Youth
Report)
26% of teens who bought a smartphone for the first time got a second hand
smartphone (source: The Mobile Youth Report)
Buyer Behavior Key Concepts
Emotion vs Logic: People buy on emotion and justify with logic. Traditional
research (through surveys or online questionnaires) is often limited to
appreciating only the logic of behavior e.g. “Q: Why did you buy the phone?”
“A: Because of the QWERTY keyboard”. The quality of your insights is a
function of the quality of your relationships. The deeper the trust and
insights, the more likely people are to yield emotional answers e.g. “I bought
the phone because I didn’t want to feel left out.” Similarly, If you understand
why people buy cigarettes you also understand why people buy; why would
anyone buy a product that killed them? Logically, cigarettes don’t make
sense; cigarettes are expensive, addictive, offensive to a growing number of
people and, most importantly, dangerous. We buy at the emotional layer of
our subconscious based on the context of a product but when pushed to
justify our behavior we’ll rationalize it as a logical action.
Pink Phone Syndrome: We spend most of our lives thinking about the
opposite sex but we truly understand little about their mechanics or
complexities. It amazes me that the best design agencies can do when
considering these vast oceans of misunderstanding the best the can come
up with is the pink phone. If we look at the data we start to understand why
the creative industry is so poor at understanding the needs of female
customers: only 3% of the advertising industry’s creative directors are
women. Only 1 of the last 85 winners of Best Director at the Academy
Awards was a woman.
Buyer Behavior Resources
• Can Samsung beat Apple by spending more on advertising?
• Change Agents: Author Graham Brown reveals who is the real driving
force of mobile innovation
20
Customer Experience
Customer Experience Reports
• Download Report Preview: Peer to Peer Customer Service and Loyalty
• Download Report Preview: Winning the Hearts and Minds of Young
Customers
• Download Report Preview: Youth and Retail for Mobile Brands
Customer Experience Quotes
“You‘ve got to start with the customer experience and work back toward the
technology – not the other way around.” – Steve Jobs
“We hung out with them at malls, ate dinner with them, went shopping and
clubbing with them and spent a lot of time looking in their wallets and talking
about money,” – David McQuille, Group Customer Experience at OCBC
Bank
“Think about your device. Battery life is a challenge for most people. You
shouldn’t need to carry around a charger to make it through the day. If your
kid spills their drink on your tablet, the screen shouldn’t die. And when you
drop your phone, it shouldn’t shatter.” – Google CEO, Larry Page
21
“LG is continuously innovating to offer creative ways to offer a user
experience that adds value to our customers. It’s the positive UX that will
differentiate smartphones in 2013 and beyond, not only cutting-edge
hardware specs.” – Jong-seok Park, President and CEO of LG Electronics
Mobile Communications
Customer Experience Statistics
56% of youth believe that a good mobile service experience depends on
customer care and network quality (source: The Mobile Youth Report)
63% of youth believe that a good smartphone experience depends on
device quality and customer support (source: The Mobile Youth Report)
21% of youth said that hidden fees and unexplained costs were their biggest
concerns negatively affecting their mobile experience (source: The Mobile
Youth Report)
The top 3 factors that contribute most to customer experience are Brand
Trust (65%), Customer Service (62%) and Earned Media (58%)  (source:
The Mobile Youth Report)
81% of people share negative experiences with friends and family while
72% share positive experiences (source: The Mobile Youth Report)
Customer Experience Key Concepts
Total Cost of Ownership: The complete cost of owning a device or
subscribing to a service factoring in all the monetary and non-monetary
costs after the sale. For example, buying an expensive charger for the
phone increases the TCO. Downloading software updates although free
may also increase the TCO because they require effort and energy on the
customer’s behalf.
Customer Experience Resources
• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience
• The Top 3 Reasons Why Youth Buy Samsung (and why these are not
enough to beat Apple)
22
Customer Service
Customer Service Reports
• Download Report Preview: Customer Service is Youth Marketing
• Download Report Preview: Peer to Peer Customer Service and Loyalty
Customer Service Quotes
Customer service is your best marketing strategy – mobileYouth
“We believe that customer service shouldn’t be just a department; it should
be the entire company.” – Tony Hsieh, CEO Zappos
“Companies are learning that it’s much better to offer customers a place to
give direct feedback at their virtual doorstep than to ignore complaints and
let them crop up everywhere” – Reich & Solomon, Media Rules
“The goal as a company is to have customer service that is not just the best
but legendary.”
– Sam Walton
“But, the thing is, since I always had my own little shop and direct access to
the public, I’ve been able to build up a technique without marketing people
ever telling me what the public wants.” – Vivienne Westwood
23
“We see our customers as invited guests to a party, and we are the hosts.
It’s our job every day to make every important aspect of the customer
experience a little bit better.” –
Jeff Bezos, CEO Amazon.com
“Customer service is just a day in, day out ongoing, never ending,
unremitting, persevering, compassionate, type of activity.
” – Leon Gorman, CEO L.L.Bean
Customer Service Statistics
45% young customers abandon a brand because of poor customer service
(source: The Mobile Youth Report)
66% of customers switched a service because of poor customer service
(source: Accenture)
71% of youth seek non-traditional avenues to customer service before trying
the call center (source: The Mobile Youth Report)
75% of brand interaction is customer service (source: The Mobile Youth
Report)
81% of customers consult peers to solve smartphone issues (source: The
Mobile Youth Report)
Effective peer-to-peer customer service increases acquisition rates (+27%),
retention rates (+31%) and overall satisfaction (+33%) (source: The Mobile
Youth Report)
Customer Service Key Concepts
Customer Experience: The 3 factors that support customer experience are
trust, customer service and earned media. Trust depends on the reliability of
your product. Customer service is a key touch-point accounting for 75% of
all customer interactions. Earned media is the story customers tell about
your brand to each other. Improve the 3 factors of customer experience to
increase word of mouth and loyalty among customers.
Peer-to-Peer Customer Service: Bottom-up models of customer service
e.g. peer-to-peer that encourage customers to solve each other’s problems.
24
Peer-to-peer customer service turns what is traditionally a cost to the
business into a social benefit to the customer.
Traditional Customer Service: Top-down models of customer service e.g.
call centers that require customers to route through a centralized portal of
information to solve their problems/issues.
25
Influence
Influence Reports
• Download Report Preview: Fans
• Download Report Preview: Metrics and Youth Marketing
• Download Report Preview: Word of Mouth and Subscriber Acquisition
Influence Quotes
Find your Fans, the rest is mere detail – mobileYouth
You can’t buy youth trust attention anymore, you have to earn it –
mobileYouth
“Historically, our number-one growth driver has been from repeat customers
and word of mouth.” – Tony Hsieh, Zappos CEO
“We have a lot of social channels that we track on Facebook and Twitter…
we know what people that actually left BlackBerry to another platform think
about that platform or what they think about the BlackBerry platform. There’s
a lot of comments that say, “Hey, I wanna come back.” This is a target
segment that our marketing approach will specifically go after.” – Thorsten
Heins, Blackberry CEO
26
“Sell to the sold” – Seth Godin
“We take most of the money that we could have spent on paid advertising
and instead put it back into the customer experience. Then we let the
customers be our marketing.” – Tony Hsieh, Zappos CEO
“Do what you do so well that they will
want to see it again and bring their friends.” – Walt Disney
“If you do build a great experience, customers tell each other about that.
Word of mouth is very powerful.” – Jeff Bezos, Amazon CEO
“Turn strangers into friends. Turn friends into donors. And then… do the
most important job:
Turn your donors into fundraisers.” – Seth Godin
“We are in the maturing market and when we talk about smartphones, we
have to know what our segment market is – we have to know who our
audience is. We cannot be everybody’s darling, if we did, we will be
swimming in a school of sharks.” – Thorsten Heins, Blackberry CEO
Influence Statistics
83% of youth bought their handsets based on what peers (not what ad
agencies) said about the brand (source: The Mobile Youth Report)
Fans aren’t 2 or 3 times more influential than your average customer, they
are up to 100x more influential than customers (source: The Mobile Youth
Report)
The average American youth will have seen 120,000 marketing messages
by age 17 (source: Kahnemann)
The human brain gates out 95% of all the information it receives at any one
time (source: Graham D Brown)
70% of youth feel annoyed after watching an ad and 44% say they are
unlikely to buy the product advertised (source: The Mobile Youth Report)
Top influencers of youth smartphone purchase decisions are Friends (94%),
Siblings(86%), Parents(70%) and Neighbors (57%) (source: The Mobile
Youth Report)
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Influence Key Concepts
Attention Economy: Youth don’t wake up thinking about your brand
anymore. Advertising was born of an era when youth trust and attention
were abundant. That simply isn’t true anymore.
Authenticity: In the post Big-Idea era of marketing, authenticity can no
longer be bought or sold, traded as a commodity by clever advertising
agencies, it must be earned. More importantly, it’s a process that takes time.
Agencies cling to the idea of viral video campaigns that can project a boring
brand into the world of youth authenticity overnight thus bypassing the
necessary groundwork and foundations that often takes years if not decades
to create. Perhaps the root of the problem lies in an industry that exists on a
quarterly basis, where very little space is given to projects that provide long
term structure and authenticity for a brand, favoring instead short, sharp
“hits” that spike youth attention only to die away until the next campaign is
resurrected.
Awareness: Terms like “awareness”, “top of mind” and “market share” are
increasingly no more than vanity metrics for brands that insist on following
them. If customers like you, be afraid, be very afraid. Because, in today’s
attention economy being liked means being invisible.
Beachheads: A market segment of Fans who display a high NPS score for
your product or brand. Sometimes called a “hot spot” when used with brand
visual heatmaps.
Content vs Context: The world isn’t as it seems, it’s as we tell it. Physical
form (content) is shaped by meaning (context). Content is the product you
put out in the market – what you make for them. We become easily seduced
by the world of Content, the product, advertising and design agency spin.
Content is the value we see. But context is the only value people feel.
Context is the meaning that customers give to your product – what you
make them feel. Consider that word context again. Context: from the latin
“con” – to join, and “textere” – to weave fabric. Context is the fabric. Take
the component threads out of the tapestry they are meaningless but as one
they tell a story.
Democratization of Media: Every customer asks this of your marketing
“where am I in this story?” In the medieval era, storytelling was confined to
those who had money and like manuscripts, advertising has been the
preserve of the elite. We’ve created whole industries around advertising that
serve the interest of these elite patrons. We’re constantly told that
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“customers don’t know” and, therefore, it’s the prerogative of the priesthood
(agencies) to tell us what we do really want in our lives. But customers today
don’t have to wait to be picked, now they’re becoming celebrities and
experts by picking themselves, a move to decentralization that is rendering
the old fashioned ad agency model of marketing useless.
Earned Media: Earned media (or free media) refers to favorable publicity
gained through promotional efforts other than advertising, as opposed to
paid media (PR, advertising, sponsorship etc) (source: Wikipedia). The core
to youth marketing is Earned Media. Fans drive Earned Media and if you
want an army of vocal Fans you need an active Frontline. This complete
System is measurable through simple metrics like NPS.
Fans: key advocates of your brand and its products. It’s Fans that
customers listen to when making informed product choices. It’s Fans that
encourage them to switch mobile phones. It’s Fans that give them reasons
to leave a service. It’s Fans that educate them about new products.
mobileYouth research found Fans weren’t simply 2 or 3 times more
influential than the average customer but up to 100 times more. When
advertising agencies try to take brand stories onto Facebook they still
persist in telling the brand story albeit with a social twist. What they fail to
realize is that it’s not who’s telling your story but whose story you’re telling
that counts. Fans are the new advertising industry. Fans follow people and
products not brands. The question we should be asking is not “how do we
engage the fans?” but “how do we break down the walls that prevent fans
from engaging us?”
Fans vs Customers: If you don’t know who your Fans are, you only have
customers. Focus on the 10% of the market that influences the remaining
90%, the 90% aren’t listening anwyay. Too many brand managers spend
their professional life trying to get customers to like them when all along they
ignored the fans who already loved the brand.
Liked vs Loved: If your customers like you, be afraid, be very afraid. If
youth “like” you, you might as well be invisible.
Net Promoter Score: a customer loyalty metric developed by (and a
registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It
was introduced by Reichheld in his 2003 Harvard Business Review article
“One Number You Need to Grow”.NPS can be as low as −100 (everybody is
a detractor) or as high as +100 (everybody is a promoter). An NPS that is
positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is
excellent. (source: Wikipedia). A lot of time is wasted by agencies talking
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about the obscure nature of “buzz” and “engagement”. Behind this rhetoric
lies a fear that should we be able to measure it, we’ll discover that
advertising is, in effect, pretty useless at impacting recommendation. If an
agency tells you that Earned Media isn’t measurable because they’re
dragging their feet, go with one that tells you it is possible.
Net Promoter Score vs Net Promoter System: What counts today in the
youth market is recommendation. That’s why both Apple and Zappos share
a common facet to their marketing that is rooted in quantifiable metrics tied
to customer recommendation. SatMetrix’s Net Promoter Score is an
increasingly popular metric to measure recommendation levels for
customers but it’s widely abused. Net Promoter Score is commonly used by
companies as a customer satisfaction index, in effect treating it as a vanity
metric. Companies like Apple use a Net Promoter System instead, feeding
back information from the retail front into the HQ on a daily basis resulting in
a faster customer experience improvement cycle and increasing their word
of mouth marketing.
Telephones vs Loudspeakers: Social Business is the telephone –
connecting people. Social Business doesn’t need to tell everyone its story it
simply provides a tool for people to tell theirs. We pick up the phone and say
“You’ll never guess who I just saw at the train station…” Would the phone be
useful if every conversation we have, had to be about the phone company?
Of course not, but that’s how creative agencies behave today – finding new
ways to get us to talk about them. Ad agencies and boring brands are the
Loudspeaker – dominating conversations and interrupting people to get their
message across, often placating the inconvenience with humor or trying to
be clever.
Influence Resources
• Can Samsung beat Apple by spending more on advertising?
• Change Agents: Author Graham Brown reveals who is the real driving
force of mobile innovation
• The Power of the Outlier: Author Graham Brown discusses why Outsiders
are key to innovation
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Innovation
Innovation Reports
• Download Report Preview: Youth, CoCreation and Innovation
Innovation Quotes
The first ever recorded telecoms innovation driven by the youth market was
Dengon Dial in Japan – a simple “hack” that turned fixed-line public
telephone message boxes into a youth-driven dating service (more about
this in the book “The Mobile Youth by Graham Brown”).
The segments quickest to adopt new mobile tech aren’t mainstream execs
but often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US,
young female teens in Japan or young black females in South Africa.
“Communications tools don’t get socially interesting until they get
technologically boring.” ― Clay Shirky, Here Comes Everybody: The Power
of Organizing Without Organizations
“I’ve seen the demonstrations on the Internet about how you can find
another person using a Zune and give them a song they can play three
times. It takes forever. By the time you’ve gone through all that, the girl’s got
up and left! You’re much better off to take one of your earbuds out and put it
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in her ear. Then you’re connected with about two feet of headphone cable.”
– Steve Jobs
“Look at the design of a lot of consumer products — they’re really
complicated surfaces. We tried to make something much more holistic and
simple. When you first start off trying to solve a problem, the first solutions
you come up with are very complex, and most people stop there. But if you
keep going, and live with the problem and peel more layers of the onion off,
you can often times arrive at some very elegant and simple solutions. Most
people just don’t put in the time or energy to get there. We believe that
customers are smart, and want objects which are well thought through.” –
Steve Jobs
“What are the five products you want to focus on? Get rid of the rest,
because they’re dragging you down. They’re turning you into Microsoft.
They’re causing you to turn out products that are adequate but not great.” –
Steve Jobs
Innovation Statistics
40% of innovations introduced by a manufacturer is in internal processes
and 35% of innovation introduced by service firms are in organizational
processes. Only 27% of innovations introduced by both contribute to
marketing (source: StatFi)
Flip partnered with students to identify pain points and innovate its video
camera. The company went on to grab 20% video market share from Sony
eventually selling its operations for $590 million (source: Cisco)
83% of hackathon attendees seeking to demo their innovative products to
investors are below the age of 35 (source: tokbox)
Innovation Key Concepts
Co-Creation: Working with other people to find solutions to existing issues
that may appear insignificant. We need to move from viewing youth as
destinations for our marketing messages to treating them as partners in its
production.
Cognitive Surplus: “This linking together in turn lets us tap our cognitive
surplus, the trillion hours a year of free time the educated population of the
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planet has to spend doing things they care about. In the 20th century, the
bulk of that time was spent watching television, but our cognitive surplus is
so enormous that diverting even a tiny fraction of time from consumption to
participation can create enormous positive effects.” ― Clay Shirky
Cultural Hacking: Customers changing the device or service in innocuous
ways to make it better or to derive more social benefit from it.
Department of Great Ideas: You don’t need a factory to produce a car
anymore. If you have a laptop and a connection, you are a factory.
Experts vs. Amateurs: Amateur derives from the latin “amare” – to love
and “amator” – lover. When we study how innovation really happens we
discover it to be an informal process, driven by those who are passionate
about innovation rather than those who get paid to do it. Amateur bloggers
who upstage professional journalists in covering breaking news reports are
a great example. Experts by their very nature are highly trained, a learning
process that encourages expertise over experience and time in the office
rather than the field. Digital has changed innovation irrevocably,
empowering every individual to take part in the process. Mobile banking’s
future (and perhaps the future of the world’s retail banking system) doesn’t
come from a design agency in Munich or San Francisco but a student in
Kenya.
Genchi Genbutsu: What we should be doing is practising what Toyota calls
“Genchi Genbutsu” which, in Japanese, means literally “go and see for
yourself”. Or, as the West corrupted the phrase, more poignantly “get your
boots on”. An idea that centers on being at the frontline where interactions
are happening.  Applied to youth marketing in mobile, it means a company
can’t outsource its customer insights to agencies.  People in the company
need to immerse themselves in youth culture. Customer service creates the
Gemba culture of “getting your boots on”. Managers are “out there”,
immersed into the culture and everyday behaviors of their customers.
Gemba culture helped Toyota reduce the internal barriers that inhibited
innovation on the manufacturing floor. Managers wouldn’t sit in comfortable
offices that removed themselves from the outside world, they were active on
the floor or in visiting dealerships. Toyota also built out into the youth market
with its innovative Scion range by immersing itself into West Coast hip hop
culture (as opposed to hiring an agency to make-over their car). By
exposing the company to real world insights, customer service breaks down
the walls and prevents the Kodak phenomenon of isolating yourself from the
market and creating echo chambers.
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Hacker Way: Facebook’s “Hacker Way”, adopted as their internal modus
operandus, teaches that “done is better than perfect”. It’s better to put
something out there and iteratively evolve the product with user feedback
and interaction than to scheme up finished products, as MySpace did, in the
hope of the perfect solution.
Innovation is Culture: Innovation is culture not strategy. You can no longer
have an “innovation strategy” or “innovation department”, you simply have a
culture that is either inhibitive or conducive to innovation. Within that culture
is a key assumption – that innovation happens on the outside of the
company walls and, therefore, the role of the company is to break down
these walls and let innovation in. Creating social space for innovation is as
important as having the right people to make it happen. London had its
coffeehouses, Vienna its salons and the Valley its meetups and sushi bars.
W.L.Gore founder of the all-weather Goretex company said that
“communication really happens in the carpool,”  where people could feel
free to talk openly without bosses around. 3M engages all its employees,
not just the scientists, in its ’15 percent time’ program where they are given
the freedom to chase any idea they want. The program since its inception in
1940s has resulted in 22,800 patents. Google uses a similar ’20% percent
time’ program which gave rise to products like Gmail, Google Earth and
Google Labs. Getting innovation right means creating the space for what
people do naturally – interact. Many organizations fail to improve innovation
because they try to create fake social situations that people won’t use for
regular interaction (like the office slides or the brainstorming rooms).
Innovation is Social: Innovation is a social process. Innovation is rarely a
single disruptive step-up. In reality, silk wasn’t “discovered” by dropping the
cocoon into hot tea but through many centuries of trial and error undertaken
by silk farmers. Secondly, silk wasn’t discovered by one person but by
many. This wasn’t the work of some genius whose stature (emperess) or
intellect (Archimedes) is beyond the reach of your average mortal but by
many nameless and uncelebrated individuals. People never “innovate” they
simply interact with one another. If that interaction creates a better way to
send a message, an idea for business or more efficient business process, it
happened between two or more people and in a social context. Zuckerberg
invented Facebook because he wanted to meet girls. He wasn’t the most
socially gifted teen in his peer group. Teens developed SMS because the
network charging models built walls rather than bridges in their
communication. Wherever there is need there is innovation and there is
always a need to connect. Real innovation doesn’t happen when a design
agency exec sits in his office and stares out the window at blue sky all day
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long waiting for innovation to happen. By contrast, real innovation is a fuzzy,
messy social process that involves many hands and many interactions. In
contrast to the top-down world view of innovation that values expertise and
big ideas, innovation is often nothing more than the constant iteration of
social interaction between the experienced.
Positive Deviance: The act of cultural hacking en masse by a group of
customers who want to overcome a flaw in the product or a barrier than
prevents them connecting with each other is called Positive Deviance (PD).
PD drives innovation (e.g. with SMS). Deviance is often used in the
pejorative; rule-breakers, rebels and dissidents. But it can also be
essentially a positive force for change. What happens when deviance is the
driving force for innovation? What happens when your customers start
breaking the rules in order to produce a better product, a better way of
connecting with their friends or a better way of being significant? Positive
deviance is a simple solution to a day-to-day often mundane problem.
These solutions are often overlooked when using a top-down approach to
innovation. Positive deviance is about solving customer’s problems instead
of the industry’s, and this is why it will win you customers, not awards.
Innovation Resources
• Can Samsung beat Apple by spending more on advertising?
• Change Agents: Author Graham Brown reveals who is the real driving
force of mobile innovation
• The Power of the Outlier: Author Graham Brown discusses why Outsiders
are key to innovation
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Loyalty
Loyalty Reports
• Download Report Preview: How can Operators Win the Youth Market?
• Download Report Preview: Peer to Peer Customer Service and Loyalty
• Download Report Preview: Price and Youth Loyalty
Loyalty Quotes
Retention is the new acquisition – mobileYouth
Loyalty is a mindset not a programme – mobileYouth
Youth aren’t loyal to any brand or product, they’re loyal to what that brand
does for them – mobileYouth
“They get it home and use it, and the joy is gone. The joy is gone every day
they use it–until they’re not using it anymore! You don’t keep remembering,
‘Oh, I got a deal.’ Because you hate it!” – Tim Cook, CEO Apple
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Loyalty Statistics
74% of customers reported they participated in brand loyalty programs, only
12% said that it paid to be in the program. (source Colloquy)
The most loyal customers with top 20% NPS scores, contribute 80% of total
profits (source: The Mobile Youth Report)
60% of youth churn from mobile carrier brands because of unreliable
network not rival promotions (23%) (source: The Mobile Youth Report)
26% of all customers are thinking about switching brands any given quarter
(source: The Mobile Youth Report)
51% of youth who churn from mobile brands are influenced by their friends
and family to make the switch (source: The Mobile Youth Report)
67% youth say they would not have switched carriers if the issue was
resolved in first contact. Only 44%  say the switch would have been
prevented by a loyalty reward program. (source: The Mobile Youth Report)
Loyalty Key Concepts
Churn Rate: (sometimes called attrition rate) in its broadest sense, is a
measure of the number of individuals or items moving out of a collective
over a specific period of time. It is one of two primary factors that determine
the steady-state level of customers a business will support. The term is used
in many contexts, but is most widely applied in business with respect to a
contractual customer base. For instance, it is an important factor for any
business with a subscriber-based service model, including mobile telephone
networks and pay TV operators. (source: Wikipedia)
Net Promoter Score: a customer loyalty metric developed by (and a
registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It
was introduced by Reichheld in his 2003 Harvard Business Review article
“One Number You Need to Grow”.NPS can be as low as −100 (everybody is
a detractor) or as high as +100 (everybody is a promoter). An NPS that is
positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is
excellent. (source: Wikipedia)
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Mobile Customers
Mobile Customer Reports
• Download Report Preview: Smartphones and Ethnic Youth
• Download Report Preview: Smartphones and Teen Social Lives
• Download Report Preview: Smartphones and the Female Customer
• Download Report Preview: Teens and Instagram
Mobile Customer Quotes
“The next generation grows up thinking ‘well, of course’” – Seth Godin.
“The aim of marketing is to know and understand the customer so well the
product or service fits him and sells itself.” – Peter Drucker
“Increasingly, the mass marketing is turning into a mass of niches” – Chris
Anderson, The Long Tail
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Mobile Customer Statistics
Youth spend between 15 and 30% of their disposable income on their
mobile handsets (source: The Mobile Youth Report)
61% of youth sleep with their phone (source: The Mobile Youth Report)
Given the choice between spending their last $10 on food and spending it
on topping up their phone, 71% of youth said they would top up their phone
(source: The Mobile Youth Report)
77% of mobile carrier decisions and 47% of smartphone purchase decisions
are made by female members of a household (source: The Mobile Youth
Report)
57% of teenage girls share a new brand they discover with friends
compared to only 47% of teenage boys (source: The Mobile Youth Report)
There are 1.6 billion mobile youth in the world today (aged 5-29) (source:
The Mobile Youth Report). As a standalone country they’d be bigger than
China.
The segments quickest to adopt new mobile tech aren’t mainstream execs
but often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US,
young female teens in Japan or young black females in South Africa.
Mobile Customers Key Concepts
Addiction: Adults look at youth interaction with media and take the
shortcuts in understanding. They tell us that youth are “addicted” to mobile
phones because they can’t live without them. But, what this behavior fails to
do is understand what they are addicted to. It isn’t the phone they’re
addicted to, it’s what the phone does for them. If anything, youth are
addicted to social interaction. Because, 90% of their interaction with mobile
phones is passive, we don’t understand it. Because we don’t understand it,
we call it an addiction.
Cashless Innovators: Student change agents
Change agents: Customer Beachheads who drive product innovation
through cultural hacking. In mobile markets, change also comes from
unexpected sources. We’ve long written about change agents in their
various guises (Japanese high school girls, women in Indonesia, young
39
black females in South Africa etc) being the polar opposite of how the
established brand and their ad agency would have us think as the most
innovative users. We are shown ad imagery of middle aged execs in suits
(almost always male featuring supporting female) looking powerful and
purposeful as he peers into his mobile phone. Yet, in reality the change
agent is neither middle aged, nor male nor an executive.
Digital Natives vs. Offline Immigrants: The believe that youth are
addicted to technology is a myth. Young people appreciate the social
benefits of technology such as getting to know someone new through
Facebook but prefer to meet them in person to nurture a more meaningful
relationship. Parents and teachers are key obstacles youth face in furthering
their social lives. Youth are more like offline immigrants looking to create a
space for themselves and their friends away from parents and teachers.
Disconnected Generation: Youth today grow up without the social
connectivity their forebears once had. They aren’t allowed to play out until
dark, talk to strangers and their lives are significantly more structured. This
means they grow up without the social contact they need, turning to
technology to redress the balance.
Disruptive Divas: Young female change agents, often ethnic minorities.
Upwardly mobile and aspirational. Once a strong Beachhead for Blackberry.
Insiders vs Outliers: Change almost always happens from the outside.
When industries change, it’s the outsiders that instigate disruption. When
markets change, it’s those customers who exist at the fringes who refuse to
play ball.
Interest Economy: It’s interesting how increasingly science and scientists
are becoming sexy, particularly for girls. In the pre-digital era of the Pepsi
Generation our role models and identities were defined by the teen flick and
the advert where “nerds” were beaten to a pulp by jocks or publicly
excoriated by the cool kids. Now, however, we exist in a pluralistic media
landscape where these monolithic definitions of reality are outdated. Today,
thanks to the emergence of a many-to-many economy, anyone with a voice
can define what’s sexy and what’s not – and that means anyone. When
Chris Anderson wrote “The Long Tail” he challenged us to rethink long held
notions of economics. We started reassessing the whole idea of the “big hit”
and the “top 10”. The missing link in this story is, however, the people that
make the Long Tail possible. When we’re offered a Long Tail of options in
every category imaginable – from music to lifestyle – our notions of behavior
and identity will also change. This “Interest Economy” will unite people
40
based on passion not geography. We’ve long talked up the digital revolution
as an industry waxing lyrical about new frontiers offered by mobile and
Facebook but this isn’t a technology story, it’s a human one.
Myth of the Digital Native: The idea of the Digital Native has perhaps
helped perpetuate a whole series of ineffective tools and strategies aimed at
extending the virtual existence of this generation. Yet, what we’ve missed all
along was the simple truth that their most basic need is to be offline. Youth
may spent a lot of time online but their ultimate drive is to use these
technologies to facilitate offline interaction. They text to hook up. They BBM
to arrange times and places or exchange gossip about real world
interactions at school that day. Creating virtual spaces or technologies
disconnected from the real world is to build castles in the sky; unless the
technology funnels down to create a better offline world, it’s simply a waste
of time.
Offline: According to mobileYouth data, over 50% of youth said their
preferred form of communication is “face to face”. Even in this digital age,
face to face is still key in the recommendation process. Mobile companies
too often make the mistake of building their technologies in this online
bubble. If your product doesn’t make their offline life better, you might as
well flush it down the pan because it will survive only as long as you keep
pumping it with expensive marketing. Youth aren’t natives who live in the
online world, their existence is very much offline. Sure, they’ll use digital
tools more than their older peers but the end goal of their activity is to
generate offline interaction.
Teenage Pirates: Teen change agents. Key to the adoption of new
technologies like Facebook, Napster, Video and Messaging.
Segmentation vs Articulation: Segmentation fulfils a selfish need of the
business, articulation helps people tell their story. Articulation encourages
fans to express themselves – hopes, needs, fears, emotions. Articulation
seeks to understand the consumer as a social being living an active social
life influenced by peers and family. Segmentation ignores the social lives of
people and views them in isolation.
Users vs People: How we view the problem is the problem. If we view
mobile owners as “people” we start considering them in the social context of
their daily lives – their social needs and their interactions.
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Mobile Data
Mobile Data Reports
• Download Report Preview: Mobile Video
• Download Report Preview: Operators, Youth and Music Services
• Download Report Preview: Teens and Instagram
Mobile Data Statistics
Mobile devices will account for more than 33% of all global web traffic by
end of 2013 (source: The Mobile Youth Report)
Smartphone mobile data traffic will grow by 81% annually till 2017
accounting for 80% of all mobile data traffic (source: The Mobile Youth
Report)
49% of youth value their mobile data plans more than pay TV service (43%)
and mobile voice plans (35%) (source: The Mobile Youth Report)
55% of youth prefer accessing internet on their smartphones using any
available wi-fi connection over carrier supplied 3G or 4G connection
(source: The Mobile Youth Report)
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60% of youth access internet on their smartphones to organize a gathering
with their friends (source: The Mobile Youth Report)
Mobile Data Key Concepts
Value Added Services: Non-voice, non-text data services such as social
media, video, music and OTT messaging that allow the operators to
increase ARPU.
Mobile Data Resources
• (New Research) Social Media Best Practices: What can mobile brands do
to engage youth on social media?
• Are you ready for the Peak SMS world?
• Call me on Facebook? Will Facebook’s Network Effect catch the Mobile
Industry out?
• Is Messaging Facebook and Google’s $1 trillion giveaway?
• mobileYouth Feature Sep 2012: The future of messaging
• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,
WhatsApp and Kik
43
Mobile Messaging
Mobile Messaging Reports
• Download Report Preview: Mobile Messaging
Mobile Messaging Quotes
“Around 18 months ago we started noticing that people were using more
Skype, people were using Viber and What’s App and our SMS revenues
started going down. So we asked them why and it was a very simple
answer. It was because it was free, so we decided to turn the model upside
down.” – Vittorio Colao, CEO Vodafone
Mobile Messaging Statistics
Mobile operators lost $23 bn in 2012 due to the rise of mobile messaging
apps (source: The Mobile Youth Report)
Global mobile messaging app traffic will surpass global SMS traffic in 2014
(source: The Mobile Youth Report)
91% of young smartphone owners still rate SMS as their top messenger
choice (source: The Mobile Youth Report)
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80% of youth say they use messenger apps with SMS, instead of replacing
SMS (source: The Mobile Youth Report)
Messaging app penetration is highest among teenage girls (40%) followed
by teenage boys (30%) (source: The Mobile Youth Report)
Mobile Messaging Key Concepts
Active vs Passive Communication: 90% of communication is passive.
Just because we don’t see it or it doesn’t appear obvious doesn’t mean that
it’s meaningless. Much of our social meaning is communicated through
mundane behaviors. Think of it as ape-like grooming, where we sit around in
large groups doing nothing particularly constructive or measurable except
reinforce these peer group relationships. When parents walk into the back
room and see their teen children “hanging out” with friends they are often
perplexed by how unproductive this behavior is. They just sit there, hanging
around listening to music. They don’t even seem to be saying much.
“Hanging out” behavior is passive communication manifested on a global
basis and it continues to trouble adults who fail to see its social purpose.
Mobile Messaging Resources
• Are you ready for the Peak SMS world?
• Call me on Facebook? Will Facebook’s Network Effect catch the Mobile
Industry out?
• Is Messaging Facebook and Google’s $1 trillion giveaway?
• mobileYouth Feature Sep 2012: The future of messaging
• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,
WhatsApp and Kik
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Mobile Music
Mobile Music Reports
• Download Report Preview: Operators, Youth and Music Services
Mobile Music Statistics
44% of youth multitask while listening to music on their mobile phones when
alone (source: The Mobile Youth Report)
Youth spend 30 minutes a day listening to music on their mobile compared
to 24 minutes browsing the web and 17 minutes playing mobile games
(source: The Mobile Youth Report)
Mobile music revenues from streaming and download services will account
for more than 50% of mobile music revenues in 2013, ahead of ringtones
and ringback tones (source: The Mobile Youth Report)
31% of 21-24 year old youth prefer to download music directly on their
mobile  compared to 21% who prefer to download it to their PC (source: The
Mobile Youth Report)
32% youth have paid for a music app while 18% have downloaded  free
music apps (source: The Mobile Youth Report)
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Mobile Music Key Concepts
Social Tools: People don’t buy stuff, they buy what stuff does for them. The
mobile phone is a powerful social tool but not the only one available. People
will always weigh up the value of a social tool in comparison to other
available options (e.g. clothes, cigarettes, music, entertainment)
47
Mobile Payments
Mobile Payment Reports
• Download Report Preview: Youth and Mobile Payments
• Download Report Preview: Youth and Mobile Shopping
Mobile Payment Quotes
“We hung out with them at malls, ate dinner with them, went shopping and
clubbing with them and spent a lot of time looking in their wallets and talking
about money.” – David McQuille, Group Customer Experience at OCBC
Bank, on creating the bank’s youth brand, FRANK
Mobile Payment Statistics
Mobile payments industry will amount to a trillion dollars by 2020 (source:
The Mobile Youth Report)
42% of smartphone owners haven’t used a mobile payment method due to
security concerns (source: The Mobile Youth Report)
48
88% of youth want better security in mobile payment methods but 81% of
service providers push convenience as the key marketing message (source:
The Mobile Youth Report)
74% youth trust PayPal to provide a the best mobile payment service
followed by Amazon (72%) (source: The Mobile Youth Report)
54% youth would use a trustworthy mobile payment service during social
occasions such as going out to a cafe with friends (source: The Mobile
Youth Report)
Mobile Payment Key Concepts
Experts vs. Amateurs: Amateur derives from the latin “amare” – to love
and “amator” – lover. When we study how innovation really happens we
discover it to be an informal process, driven by those who are passionate
about innovation rather than those who get paid to do it. Amateur bloggers
who upstage professiona journalists in covering breaking news reports are a
great example. Experts by their very nature are highly trained, a learning
process that encourages expertise over experience and time in the office
rather than the field. Digital has changed innovation irrevocably,
empowering every individual to take part in the process. Mobile banking’s
future (and perhaps the future of the world’s retail banking system) doesn’t
come from a design agency in Munich or San Francisco but a student in
Kenya.
49
Mobile Video
Mobile Video Reports
• Download Report Preview: Mobile Video
Mobile Video Statistics
Mobile video will account for more than 50% of overall mobile internet traffic 
in 2016 (source: The Mobile Youth Report)
41% of youth aged 18-24 prefer watching short video content on mobile
device over their PC (33%) (source: The Mobile Youth Report)
More than 50% of video watched on mobile is less than 10 minutes in length
(source: The Mobile Youth Report)
14% of youth watch a video review of a product in their smartphones while
shopping inside a retail store (source: The Mobile Youth Report)
62% of youth engage in mobile video chat sessions with peers during late
night hours (source: The Mobile Youth Report)
77% youth use Oovoo as their primary mobile video chat app followed by
Tango (62%) (source: The Mobile Youth Report)
50
Mobile Video Key Concepts
Convergence vs Divergence: The industry vision of a singular converged
technology or device is becoming a pipe-dream. Youth are opting for a
diverged future. Take the mobile phone as an example – one mobile phone
but up to seven social tools. Youth will use different apps e.g. SMS, email,
BBM, Kik, Skype and texting in parallel to achieve different social objectives.
Cool vs Mundane: Technology becomes socially relevant when it is
mundane, not cool. People are yet to find a socially relevant use for the
latest smartphone features. Mundane features like SMS, however, are key
tools that enable people’s social lives. 90% of smartphone owners rate SMS
as the key messaging app despite availability of ‘cooler’ apps like WhatsApp
and Facebook Messenger.
Early Adopters vs Change Agents: The drivers of emerging technologies
like mobile video aren’t business users conferencing with each other but
teens in their bedrooms using services like ooVoo and young immigrants.
With respect to the latter, it’s the Hispanics in South West USA who are the
hungriest for new mobile services, not established white communities up the
Atlantic coast.
51
Operator Strategies
Mobile Operator Reports
• Download Report Preview: How can Operators Win the Youth Market?
• Download Report Preview: Prepaid Market Overview
• Download Report Preview: Price and Youth Loyalty
• Download Report Preview: Youth MVNOs and sub brands
Mobile Operator Quotes
“If you wait until there is another case study in your industry, you will be too
late” – Seth Godin
Mobile Operator Statistics
6 out of 7 billion people in the world have access to a mobile phone but only
30% have access to a bank account (source: The Mobile Youth Report)
40% of youth switch mobile operators because of poor customer service,
not lower prices from competitors (source: The Mobile Youth Report)
52
Operators are missing out on 35% of youth mobile expenditure emerging
from new services such as music, games, video and other mobile apps
(source: The Mobile Youth Report)
21% of youth said that hidden fees and unexplained costs were their biggest
concerns with mobile operators (source: The Mobile Youth Report)
56% of youth believe good mobile experience depends on customer care
and network quality (source: The Mobile Youth Report)
Mobile Operator Resources
• Are you ready for the Peak SMS world?
• BlackBerry growth depends on youth
• Call me on Facebook? Will Facebook’s Network Effect catch the Mobile
Industry out?
• Is Messaging Facebook and Google’s $1 trillion giveaway?
• mobileYouth Feature Sep 2012: The future of messaging
• Why should Samsung focus on youth now?
• Youth lead high-end smartphone market but operators need to change to
take advantage of this opportunity
• ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter,
WhatsApp and Kik
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Prepaid
Prepaid Reports
• Download Report Preview: Prepaid Market Overview
• Download Report Preview: Price and Youth Loyalty
• Download Report Preview: Youth MVNOs and sub brands
Prepaid Statistics
Prepaid subscriptions dominate emerging markets of Africa (96%),  Asia
(85%) and Latin America (66%) (source: The Mobile Youth Report)
91% of smartphone growth in 2012 came from prepaid subscribers (source:
The Mobile Youth Report)
Youth on prepaid accounts stay with a carrier for an average of 22 months –
similar time period as a post-paid connection (source: The Mobile Youth
Report)
65% youth prefer prepaid connections because they believe it’s a fair
relationship between the brand and customer (source: The Mobile Youth
Report)
54
Youth on prepaid accounts spent most of their time browsing the internet (25
min per day), checking social networks(17 min per day) and using instant
messenger apps (16 min per day) (source: The Mobile Youth Report)
55
Pricing
Pricing Reports
• Download Report Preview: Prepaid Market Overview
• Download Report Preview: Price and Handset Purchase Decisions
• Download Report Preview: Price and Youth Loyalty
Pricing Statistics
Youth prioritize safety features like warranty (78%) and durability (66%) over
price (42%) when making a smartphone purchase decision (source: The
Mobile Youth Report)
56% of marketers believe youth abandon brands because of cheaper
options from rival brands but only 29% of youth agree that they have
abandoned a brand due to cheaper prices elsewhere (source: The Mobile
Youth Report)
96% youth say price is a key determinant of purchase decision when buying
a secondary handset i.e. a feature phone that acts as a backup for the
primary smartphone (source: The Mobile Youth Report)
56
Youth spend 36% of their monthly budget on mobile and weight increasing
mobile expenses against social experiences like going to a restaurant with
friends (20%) and shopping with friends (32%) (source: The Mobile Youth
Report)
Operators like Safaricom in Kenya and Verizon Wireless in the US have
historically had lower churn compared to rival carriers despite higher prices
(source: The Mobile Youth Report)
57
Retail
Retail Reports
• Download Report Preview: Youth and Mobile Payments
• Download Report Preview: Youth and Mobile Shopping
• Download Report Preview: Youth and Retail for Mobile Brands
Retail Quotes
“We want interactions with Optus to exceed expectations and the feedback,
both good and bad, from our pilot stores will be invaluable in helping us
shape the experience for the rest of the transformation” – Rohan Ganeson,
MD of retail sales at Optus
“I worked for Apple Retail for a couple of years in college. During my time
there they had implemented the net promoter system, and I truly loved it.
Unfortunately I can’t give an NPS opinion from a management perspective,
but from an employee’s perspective, it helped motivate me to do my best
every day because anyone could be a detractor. It was also great when,
during meetings, our management team compiled the NPS feedback and
we got to hear verbatim what our customers thought of our service.” Cat
Kobe – ex Apple Genius employee
58
“Our mission was to build a place to enrich the lives of customers…a place
to gather, to learn and to experience” – Ron Johnson, founder Apple Retail
“Every sofa, bus, train is a shop front as people are looking at their phones.”
– Andrew Harrison, CEO Carphone Warehouse
“But, the thing is, since I always had my own little shop and direct access to
the public, I’ve been able to build up a technique without marketing people
ever telling me what the public wants.” – Vivienne Westwood
“Led by mobile, a commerce revolution is under way. Technology is creating
a new web-enabled retail interface, a new seamless, multiscreen commerce
experience that connects consumers anytime, anywhere. This will expand
shopping beyond conventional store environments and e-commerce sites.
How we shop is being transformed, and eBay Inc. intends to be a leader in
this new commerce world.” – John Donahoe, eBay President and CEO
“People shop and learn in a whole new way compared to just a few years
ago, so marketers need to adapt or risk extinction” – Brian Halligan, Author
Inbound Marketing
Retail Statistics
Youth spend more than $50 per trip on average compared to adults who
spend $30 or more (source: The Mobile Youth Report)
73% of young women call a friend from the store to ask for their opinion
while 58% of men search the web on their smartphones for more info
(source: The Mobile Youth Report)
58% youth prefer to shop in a physical retail store compared to 45% who
prefer online stores (source: The Mobile Youth Report)
76% of youth engaged in showrooming i.e. they visited a store to ‘look’ and
‘try’ products before buying them online (source: The Mobile Youth Report)
46% of youth use their smartphones while in a retail store to call peers fro
advice followed by looking for product reviews (28%) (source: The Mobile
Youth Report)
59
Retail Key Concepts
Frontline: The point at which the customer interacts with the brand (often
retail). There are many forms of a Frontline: retail, events or online
communities. Frontlines are a key part of a successful youth marketing
strategy today because it’s at the Frontline where the brand touches the
daily lives of customers and fans. 75% of customer interaction happens
through customer service. That means the majority of branding occurs
outside of what the creative agency does. For Apple, their Frontline is their
retail stores. In 2001, Apple spent 5% of their revenues on advertising.
Today they spend just under 1%. Why? Their Frontline is a far more
effective brand builder than advertising could ever be. Apple’s Frontline is a
key composite of their success story. When people talk about the Apple
success story many cite Steve Jobs’ genius or “design thinking” but these
factors are icing on the cake of a more robust system built around their
Frontline. Of Apple’s 43,000 employees in the US, 30,000 work for Apple
retail.
Showrooming: Customers using the retail store to try out products before
buying online (often with a different retailer e.g. Amazon)
Retail Resources
• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience
60
Samsung
Samsung Reports
• Download Report Preview: Generation Tablet
• Download Report Preview: Handset Brands and the Youth Market
• Download Report Preview: How can Samsung beat Apple?
• Download Report Preview: The 15 Brands That Will Define Mobile in 2013
Samsung Quotes
“For each of us, life is a journey. What you want is a device that can help us
on the journey.” – JK Shin, Samsung CEO
Samsung Statistics
Samsung took over Nokia and Apple as the industry leader with 33% of
global smartphone market share (source: The Mobile Youth Report)
89% of prospective smartphone buyers intend to purchase a Samsung
Galaxy smartphone because they view it as an affordable alternative to the
iPhone (source: The Mobile Youth Report)
61
34% of current Samsung smartphone owners intend to stick with Galaxy
smartphone when its time to upgrade (source: The Mobile Youth Report)
Samsung is the #1 electronic brand when youth think about buying gadgets
for themselves but falls to #3 behind Apple and Sony when it comes to
recommending brands to friends (source: The Mobile Youth Report)
Samsung Resources
• 5 ways to build a better smartphone experience (without changing the
handset)
• BlackBerry growth depends on youth
• Can Samsung beat Apple by spending more on advertising?
• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience
• The Top 3 Reasons Why Youth Buy Samsung (and why these are not
enough to beat Apple)
• What are Social Tools? Author Graham Brown shares a new way to look
at mobile phones
• Why should Samsung focus on youth now?
• Youth lead high-end smartphone market but operators need to change to
take advantage of this opportunity
62
Smartphones
Smartphone Reports
• Download Report Preview: Handset Brands and the Youth Market
• Download Report Preview: Price and Handset Purchase Decisions
• Download Report Preview: Who or What influences youth purchase?
• Download Report Preview: Winning the Hearts and Minds of Young
Customers
Overview
Mobile is the largest spending category for the 2 billion young mobile
owners around the world. Some brands focus directly on the youth market
with a hope that their young customers will stick with them in adulthood.
Other brands take an indirect approach and establish themselves as
aspirational brands for young consumers.
What approach should brands take to capture the youth market? What does
the latest research tell us about the young consumer market? What role do
mobile phones play in the social lives of youth? How do teens, ethnic youth
and young females influence the market as a whole?
63
Smartphone Quotes
“Smartphones are reinventing the connection between companies and their
customers” – Rich Miner, Co-Founder Android
“Think about your device. Battery life is a challenge for most people. You
shouldn’t need to carry around a charger to make it through the day. If your
kid spills their drink on your tablet, the screen shouldn’t die. And when you
drop your phone, it shouldn’t shatter.” – Larry Page (Google CEO)
“Simple can be harder than complex: You have to work hard to get your
thinking clean to make it simple. But it’s worth it in the end because once
you get there, you can move mountains.” – Steve Jobs (Apple CEO)
“Communications tools don’t get socially interesting until they get
technologically boring.” ― Clay Shirky, Here Comes Everybody: The Power
of Organizing Without Organizations
“For each of us, life is a journey. What you want is a device that can help us
on the journey,” JK Shin, Samsung CEO
“LG is continuously innovating to offer creative ways to offer a user
experience that adds value to our customers. It’s the positive UX that will
differentiate smartphones in 2013 and beyond, not only cutting-edge
hardware specs.” – Jong-seok Park, President and CEO of LG Electronics
Mobile Communications
Smartphone Statistics
83% of youth bought their handsets based on what peers (not what ad
agencies) said about the brand (source: The Mobile Youth Report)
Youth spend between 15 and 30% of their disposable income on their
mobile handsets (source: The Mobile Youth Report)
61% of youth sleep with their phone (source: The Mobile Youth Report)
Given the choice between spending their last $10 on food and spending it
on topping up their phone, 71% of youth said they would top up their phone
(source: The Mobile Youth Report)
64
Smartphone Key Concepts
Bring Your Own Device (BYOD): Key trend in the enterprise market.
Employers allowing employees to bring their own smartphones to work
rather than bulk buy corporate devices. The shift is opening the door for
devices like Samsung and Apple while at the same time squeezing out
Blackberry as younger employees introduce these new brands into the
workplace.
Form Factor: Unique size and shape of a component or device (such as a
circuit board, disk drive, or power supply of a computer) that determines its
fit (physical compatibility) or interchangeability with other components or
devices of a system. (source Business Dictionary)
Hard Factors: Physical elements of the product experience that cannot be
changed by marketing (the content) e.g. design, form factor, tariffs.
Pink Phone Syndrome: We spend most of our lives thinking about the
opposite sex but we truly understand little about their mechanics or
complexities. It amazes me that the best design agencies can do when
considering these vast oceans of misunderstanding the best the can come
up with is the pink phone. If we look at the data we start to understand why
the creative industry is so poor at understanding the needs of female
customers: only 3% of the advertising industry’s creative directors are
women. Only 1 of the last 85 winners of Best Director at the Academy
Awards was a woman.
Smartphone: A smartphone is a mobile phone built on a mobile operating
system, with more advanced computing capability connectivity than a
feature phone (source: Wikipedia)
Soft Factors: The non-physical elements of experience that are dependent
on marketing e.g. earned media, trust. 90% of brand is shaped by soft
factors.
Total Cost of Ownership: The complete cost of owning a device or
subscribing to a service factoring in all the monetary and non-monetary
costs after the sale. For example, buying an expensive charger for the
phone increases the TCO. Downloading software updates although free
may also increase the TCO because they require effort and energy on the
customer’s behalf.
65
Smartphone Resources
• 5 ways to build a better smartphone experience (without changing the
handset)
• BlackBerry growth depends on youth
• Can Samsung beat Apple by spending more on advertising?
• Selling Smartphones: Youth Lead the Multi-Channel Retail Experience
• The Top 3 Reasons Why Youth Buy Samsung (and why these are not
enough to beat Apple)
• What are Social Tools? Author Graham Brown shares a new way to look
at mobile phones
• Why should Samsung focus on youth now?
• Youth lead high-end smartphone market but operators need to change to
take advantage of this opportunity
66
Social Media
Social Media Reports
• Download Report Preview: Smartphones and Teen Social Lives
• Download Report Preview: Social Media for Mobile Brands
• Download Report Preview: Social Media, Advertising and Influence
• Download Report Preview: Teens and Instagram
Social Media Quotes
“It’s a strange business model at present where telcos invest huge amounts
of money to upgrade data networks and players like YouTube, who gets the
revenue, don’t pay anything.” – Marten Pieters, Vodafone India CEO
“You don’t need to control the conversation to reap the benefits” – Henry
Jenkins
“For a truly effective social campaign, a brand needs to embrace the first
principles of marketing, which involves brand definition and consistent
storytelling.” – Simon Mainwaring
“Cooperating creates group identity.” ― Clay Shirky, Here Comes
Everybody: The Power of Organizing Without Organizations
67
“People share, read and generally engage more with any type of content
when it’s surfaced through friends & people they know and trust” – Malorie
Lucich, Facebook
“We are in a world where most American citizens over the age of 12 share
things with each other online.” – Clay Shirky
“The key is to produce something that both pulls people together and gives
them something to do” – Henry Jenkins
“This linking together in turn lets us tap our cognitive surplus, the trillion
hours a year of free time the educated population of the planet has to spend
doing things they care about. In the 20th century, the bulk of that time was
spent watching television, but our cognitive surplus is so enormous that
diverting even a tiny fraction of time from consumption to participation can
create enormous positive effects.” ― Clay Shirky
Social Media Statistics
47% youth follow brands on social media because the brand organizes
events that youth want to attend. Only 13% of young social media followers
own the brand’s product. (source: The Mobile Youth Report)
67% youth interact with posts from friends compared to 42% who interact
with promotion posts from brands (source: The Mobile Youth Report)
Youth are more likely to interact with strangers on social media who share
common interests (33%) than brands (27%) (source: The Mobile Youth
Report)
50% of youth seek out brands on social media because they want a
response about an issue they have (source: The Mobile Youth Report)
41% of youth trust a brand based on positive online reviews on social media
while only 25% of youth say that the number of ‘likes’ is key to building trust
(source: The Mobile Youth Report)
Social Media Key Concepts
All Media is Social: When experts talk of the changing media landscape,
they often point to a transition from “traditional” media (TV, print etc) to
“social media” (Facebook, Twitter etc) but this terminology is misleading. All
68
media is social. Media (meaning “inbetween”) exists to provide a channel
between people. What is now known as “traditional” media was “social”
media back in 1989. “Social media”, as a term, is misleading because it
infers there is “social” and “unsocial” media, the latter being everything that
came before Facebook. If we accept there is an “unsocial” media we also let
every media owner and advertiser off the hook for allowing their storytelling
to become ineffective; there always have been “conversations”, don’t just
assume it’s something the “social media” guys should be doing.
Brand Democracy: Customers are the brand. It’s not who’s telling your
story but whose story you’re telling
Many to Many: Customers today have the tools to perform the functions
business used to have control over, so why stand in their way? Not only are
they more motivated, they have more experience of your product and work
24/7. When we insist on interfering with ad agencies, design agencies and
call centers we turn these functions from being a social benefit into a cost
center. We then set about outsourcing and reducing their scope in the name
of efficiency and cost reduction. Telephony is a Many-to-Many technology.
Content is neither controlled nor created. By virtue of being the platform, the
provider only has to make sure the tools are working rather than constantly
having to invest in creating new and engaging content for people to pay
attention to.
Sharing: What people share today on Facebook is little different than what
they shared in the days before social media. Same behaviors, different
tools. In fact, it’s nothing new. Back then we used photo albums and verbal
gossip. Now, we’re simply bringing it into the 21st century. In a world of
scarcity, we are driven to horde. In a world of abundance, however, we are
driven to share. If your neighbor drove to your office every day, you are
more likely to pool your transport. If everyone knew everyone else’s
movements, the lanes of the Californian highways would see significantly
less traffic. They’d have to have 2 carpool lanes and less for the single
drivers.
Social Media Resources
• (New Research) Social Media Best Practices: What can mobile brands do
to engage youth on social media?
• Call me on Facebook? Will Facebook’s Network Effect catch the Mobile
Industry out?
69
Tablets
Tablets Reports
• Download Report Preview: Generation Tablet
Tablets Quotes
“Tablets will be the mother of all markets” – Tim Cook, CEO Apple
“We sell the hardware at our cost, so it is break-even on the hardware. We
want to make money when people use our devices, not when people buy
our devices.What we find is that when people buy a Kindle they read four
times as much as they did before they bought the Kindle. But they don’t stop
buying paper books. Kindle owners read four times as much, but they
continue to buy both types of books” – Jeff Bezos, CEO Amazon
Tablets Statistics
Global tablets shipment will exceed 350 million by 2017 (source: The Mobile
Youth Report)
26% of people own and use PC, tablets and smartphones together instead
of replacing one with another (source: The Mobile Youth Report)
70
Tablet app revenues ($48 bn) will surpass smartphone app revenues ($44
bn) in 2018 (source: The Mobile Youth Report)
76% of parents say that children under 18 are the designated primary users
of tablets in the family (source: The Mobile Youth Report)
More than 1 in 10 children under the age of 4 has regular access to a tablet
(source: The Mobile Youth Report)
71
Trust
Trust Reports
• Download Report Preview: Customer Service is Youth Marketing
• Download Report Preview: Metrics and Youth Marketing
• Download Report Preview: Who or What influences youth purchase?
Trust Quotes
“Trust, once eroded, is very hard to restore.” ― Dan Ariely, Predictably
Irrational: The Hidden Forces That Shape Our Decisions
Trust Statistics
90% youth trust peer recommendation over all forms of online and
traditional advertising (source: The Mobile Youth Report)
65% people believe trust in a brand emerging from the product’s reliability/
durability shapes customer experience above all other product features
(source: The Mobile Youth Report)
72
Trust Key Concepts
Trust: You can’t scale trust, attention and love. All the things that factories
thought of once as scarce are now abundant.
Trust Resources
• The Top 3 Reasons Why Youth Buy Samsung (and why these are not
enough to beat Apple)
73
Youth Branding
Youth Brand Reports
• Download Report Preview: Social Media for Mobile Brands
• Download Report Preview: Social Media, Advertising and Influence
• Download Report Preview: Youth MVNOs and sub brands
• Download Report Preview: Youth, CoCreation and Innovation
Youth Brand Quotes
“Your culture is your brand” – Tony Hsieh, CEO Zappos
“For a truly effective social campaign, a brand needs to embrace the first
principles of marketing, which involves brand definition and consistent
storytelling.” – Simon Mainwaring
“Youth don’t wake up thinking about your brand anymore, get over it” –
Graham D Brown
74
Youth Brand Statistics
50% of youth recommend a brand because they have had a positive
experience with the brand (source: The Mobile Youth Report)
On average 20% of youth say that brand is important when making a
smartphone purchase decision while 50% say it’s not an important factor
(source: The Mobile Youth Report)
63% of smartphone owners believe that satisfaction with a smartphone
brand depends on device quality and support (source: The Mobile Youth
Report)
88% of all positive recommendation for a brand are generated by Fans who
make up 10% of the brand’s customers (source: The Mobile Youth Report)
Youth Brand Key Concepts
MVNO: A mobile virtual network operator (MVNO) (or mobile other licensed
operator (MOLO) in the United Kingdom) is a wireless communications
services provider that does not own the radio spectrum or wireless network
infrastructure over which the MVNO provides services to its customers. An
MVNO enters into a business agreement with a mobile network operator to
obtain bulk access to network services at wholesale rates, then sets retail
prices independently. An MVNO may use its own customer service and
billing support systems, marketing and sales personnel or it may employ the
services of a Mobile Virtual Network Enabler (MVNE) (source: Wikipedia)
Storytelling: The first hand prints of the young paleolithic girl found a cave
wall from over 10,000 years ago are no different from your 2 year old
daughter’s hand prints in paint at kindergarten. Our basic need to tell
stories, and the Social Code that compels it, is as old as human history itself
and reflected in these 1000 year old scraps of parchment. While the Social
Code remains timeless, what has changed is the canvas on which we tell
these stories. We tell stories to make sense of the world, its tools and
products. Products are valued not by their parts and components, they are
valued by the stories people tell about them. Marketing is about delivering a
customer experience that is consistent with the brand promise.
Youth vs Youthful: the difference between what you say and what you do
about your brand. For example, advertising may promote a Youth brand
75
where a Youthful brand (like Apple) appeals to youth without being overtly
young by promoting a positive customer experience.
76
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(mobileYouth) The Youth Mobile Handbook - Key Resources on Youth Mobile Culture

  • 1.
  • 2. Download this handbook for free! Go to http://www.mobileYouth.org and sign up to our newsletter
  • 3. Introduction to the $500 billion youth mobile market “The future’s already out there, it’s just not evenly distributed” - William Gibson If you want to understand youth trends and mobile culture, the Youth Mobile Handbook is the starting point. If you’re a mobile professional, involved in research and insights or a youth marketer, you will benefit from accessing 10 years of our research insights and knowledge in one handy document. We’ve compiled easy lists of: • Statistics • Key concepts • Resources How you can use this information: • content for your next presentation to the board • ideas and data to brainstorm with your team members • links to research reports to acquire for internal strategy and marketing 1
  • 4. About mobileYouth mobileYouth is a research advisory firm focused on the youth mobile market. We help clients better understand young mobile owners through research and consultancy. Our annual Mobile Youth Report which is sold into over 80 countries and 300+ clients. We are a team of digital anthropologists, published authors and research analysts covering 65 markets. mobileYouth was founded by Graham Brown and Josh Dhaliwal in 2001 to provide IT, telecoms and media clients with research on youth mobile culture. We work with major brands such as Nike, Vodafone and MTV who want to reach out to the next generation of customers but are uncertain how to do that and confused as to how to reach them. We work with you to understand your business model and provide market reports on how the next generation uses mobile phones and the implications for your business. We provide you with information on “why” your prospects are using mobile phones the way they are and help you understand the implications for your business, so that you can make meaningful decisions on how to connect with these users now, and also in the future. 2
  • 5. TABLE OF CONTENTS Why are youth important to your business? 5 Advertising 14 Apple 17 Buyer Behavior 19 Customer Experience 21 Customer Service 23 Influence 26 Innovation 31 Loyalty 36 Mobile Customers 38 Mobile Data 42 Mobile Messaging 44 Mobile Music 46 Mobile Payments 48 Mobile Video 50 Operator Strategies 52 Prepaid 54 3
  • 6. Pricing 56 Retail 58 Samsung 61 Smartphones 63 Social Media 67 Tablets 70 Trust 72 Youth Branding 74 Next Step 77 4
  • 7. Why are youth important to your business? Overview There are 3 reasons why youth need to be on board to keep your brand relevant – not just in the future but right here today. Before we get started, here are 3 reports you’ll be interested in to give you the necessary background info, data and case studies: 3 Recommended Research Reports: • The mobileYouth Economy: The Hidden Value in Mobile’s Long Tail – a 24 page PDF report which details where the growth markets in mobile are 2013-2017. • Do Mobile Handset Brands Need to Focus on the Youth Market? – a 25 page PDF outlining the youth business case for mobile handset manufacturers. • Do Mobile Operator Brands Need an MVNO or Sub-Brand to Target the Youth Market? This 17 page research PDF compares branding options for operators and addresses the key mistakes made when engaging youth. 5
  • 8. Exploding the Myths • “Youth are cheap” • “Gen Y is fickle” • “Millennials are only good for prepaid“ We hear these words every day and every day we simply point to the evidence – great brands like Apple and Amazon have successfully built their businesses on the youth market, so why can’t you? Defining the Youth Market According to Wikipedia: Generation Y, also known as the Millennial Generation, is the demographic cohort following Generation X. There are no precise dates for when Generation Y starts and ends. Commentators use beginning birth dates from the latter 1970s, or from the early 1980s to the early 2000s. That means we’re dealing with customers from the early teens up until the threshold of their 30s. That’s a very large market and with it a very wide and complex set of mobile customers. Trying to categorize these customers as one blob for analytical convenience is as difficult as using one metric to measure their value – but that’s what we as an industry do. Redefining Value The issue stems from an inherent problem in the mobile industry – the only measure of value we have of a customer’s worth is their phone bill. But, what of the student who spends $500 on an iPhone and then puts it on prepay at $12 a month? The reality is that ARPU is a weak measure of value and particularly for mobile operators, we need to move from measuring revenue to measuring value. • Youth are cheap if we only consider ARPU • Our measures of value need to evolve from ARPU to lifetime value 6
  • 9. • Great brands like Apple and Amazon have successfully evolved from ARPU to lifetime value Apple: Building a Beachhead on the Student Market Apple got this right, first building a Beachhead in the student market with its music offering, iTunes and the iPod. From this vantage point it moved into the iPhone and the rest, as they say, is history. If Apple had gone after the high-spending executive customers, it would have been duking it out with Microsoft on the Redmond’s home turf. When I went to college, everyone used PC. Only left-handers used Macs. By the late 90s, all the college kids were using Macs. Now, the same students are IT managers and heads of departments with their iPads and iPhones. • Apple built on its brand Beachhead in the student market • Apple adopted a long term organic approach to growing the brand • If Apple had chased high end customers first, it would have lost to Microsoft The Harley Effect: What Ages Brands Nokia and Blackberry didn’t get it right. From 2006-2008 both Nokia and Blackberry rose to prominence as the leading youth brands not just in their category but globally. Nokia was ranked as the #1 youth brand in the world. Blackberry beat Coke as the most respected youth brand in South Africa in 2010, the same year of the soccer world cup (where Coke was a $500m headline sponsor). Nokia and Blackberry suffered from what we call the Harley Effect – aging with your customer base. The average age of the Harley Davidson owner is now 51. Middle aged folk remember Easy Rider and Dennis Hopper from their era as the icons of cool. The problem is, that Harley chased the high end customers rather than reinvest their profit into staying relevant with youth. Harley-Davidson Tries to Rejuvenate Its Business “Its patrons grew older and wealthier, but its efforts to cultivate a large 7
  • 10. base of female and younger riders have been marginally successful.” (source: Time Magazine) Now both brands are suffering the tail end of a slow-motion car-crash, the basketball feeding through the hose pipe and other analogies. It will take time, as with aged brands like Levis 501, for these two to rediscover their roots in the youth market and feed through to relevance once again. • Short term focus on ARPU seduces brands into focusing on high end customers • If you always chase the high end, middle market, your market will age out of relevance • Harley Davidson used to be a cutting edge youth brand but now it suffers from an aging market The 3 Reasons The Key to winning the youth market is building a compelling business case why. Why do we need youth? If it’s only about ARPU, you’re always going to chase the high end customers and end up like Harley Davidson. The challenge here is building a case around long term value, the stuff which happens off the phone bill. So, here are 3 reasons to help you build that case: 1.Youth are the High End Customers Consider the phone bill and youth appear to be cheaper than middle aged executives. According to The Mobile Youth Report, execs spend marginally more (10-20%) but are often on contract as opposed to prepaid. What isn’t factored into this equation is the complete picture: • Spend on the handset • Spend on mobile data services and accessories Our research shows that youth are far more willing to spend on the above two categories than older customers. In fact, they’re spending significantly 8
  • 11. more of their disposable income meaning they have more skin in the game, meaning they place a higher premium on getting in right. Only 42% of youth rated price as “very important” as a factor in choosing their handset (the lowest of all age groups according to our research), with 88% citing a good customer experience as key to their purchase decision. Factors included warranty, durability and reliability. That means not only do youth cite tangible factors other than price, they also offer real insight into what drives the market. Price is never a good indicator of product demand. Price is overrated by the industry. According to the Mobile Youth Report, industry execs thought “price” was the #1 reason why people bought handsets followed by experience at #2. In reality, customers cited these factors the other way round showing that as an industry, our logic and understanding of buyer behavior is very basic. When it becomes about price, you’re in the business of commodity. If handsets and operators want to know why buy, look beyond the older customers who tend to mention price and see what youth are saying about the offers. Youth propensity to spend on value added services is well documented. Youth use mobile messaging services 10x more than older peers. But beyond messaging, youth are spending on music, games, video and apps, opening up these new markets to further investment with their initial revenues. The value of youth should not be confined to the phone bill. This logic limits you to the mistakes of brands like Nokia, Blackberry and Levis. Think more like Apple and Amazon and invest in the long term. • If you consider complete spend (ARPU + handset + off bill services/ products), youth are high end customers • Youth rate experience over price. Older customers rate price. If you want to move away from the race-to-the-bottom you have to seek answers in the youth market • Youth means investing in the long term. It’s not an either-or situation with young vs old customers in the same way business should not focus on the short or the long term. Business needs to focus on both. 9
  • 12. 2.Youth are the Influencers Gen Y, Millennials and students are the most vocal when it comes to sharing reviews and information about products with peers. 57% of teenage girls and 47% of teenage boys share new brands or trends with their friends (source: The Mobile Youth Report). What separates the youth and older markets is the youth market’s propensity to create Earned Media. A quick 101 on Earned Media from Wikipedia to bring you up to speed: Earned media (or free media) refers to favorable publicity gained through promotional efforts other than advertising, as opposed to paid media, which refers to publicity gained through advertising. Earned media often refers specifically to publicity gained through editorial influence, whereas social media refers to publicity gained through grassroots action, particularly on the Internet. Earned Media is key to brand success today. But it’s not just each other they’re influencing. Consider the mother of the teenager daughter who’s just learned to use WhatsApp thanks to her daughter installing it on her Samsung Galaxy. Youth tend to be the educators and introducers of new technologies into families. Brands are often scared to let youth get hold of their products and start advocating them but this is the route to the adult market. Of course, it takes time but Apple has risen to prominence with the highest NPS (net promoter score) of all handset brands on the back of a highly vocal student population who grew up with the brand. • Youth are the most vocal customers • Youth influence each other and adult customers • The route to the adult market (long term) is through organic growth in the youth market 3.Youth Drive Innovation When parents first bought the iPad, they bought it on the promise of the educational tool painted by its initial marketing. In reality, it was youth 10
  • 13. (particularly primary school children) who soon co-opted the device and turned it into a games machine. Youth often take devices out of the context they were originally intended for and turn them into something better (Blackberry and BBM are good cases in point). SMS represents possibly the most significant example of this, given than SMS was originally designed by industry engineers as a system test tool. $1 trillion later, youth have demonstrated their ability to turn our mistakes into successes. Innovation today is fraught with risk. Consider MMS or Location Based Services – 2 very expensive mistakes made by the mobile industry. It took the best part of a decade to see even the smallest upticks in customer behavior on these two platforms. Only when the industry let go and customers took control did MMS or LBS become anything of note. De-risking innovation means allowing youth to take the technology, run with it and turn it into something useful. Something useful means applicable for the less-tolerant mass market who want products out of the box. Where youth will navigate inconsistency, the adult mass market wants everything to simply work. Launching products onto the adult mass market is risky, particularly if you are targeting corporate executives. If you filter it through the youth market first, you get a better idea of applicable charging models, usage scenarios and the messages you need to emphasize in your marketing when later approaching the mass market. • Youth drive the uptake of new technologies • Youth today provide a mirror to how the mass market will use technologies tomorrow • Investing in the innovation of the youth market today allows you to de-risk new product launches for the mass market tomorrow Summary Great brands are first built in the youth market. If you chase the high end customers your market will eventually fall off the cliff. You need to be grounded in both markets – an approach that’s worked effectively for brands like Apple and Amazon over the last decade. 11
  • 14. If you want to see how the mass market of tomorrow will be using their devices, look at how youth are using them today – mobileYouth 12
  • 15. Youth Statistics The mobile youth market is worth over $400 bn annually (source: The Mobile Youth Report) There are 1.6 billion mobile youth in the world today (aged 5-29) (source: The Mobile Youth Report). As a standalone country they’d be bigger than China. Brands with a strong youth beachhead (e.g. Apple) dominate industry profit shares (70%) despite having a small global market share (10%) (source: The Mobile Youth Report) Youth brands (e.g. Boost Mobile) have grown to become the #1 prepaid carrier in the US despite the presence of industry leaders like Verizon Wireless and AT&T (source: The Mobile Youth Report) Young Fans generate 80% of the brand’s word-of-mouth and the Fans with the top 20% NPS scores are responsible for 80% of company profits (source: The Mobile Youth Report) Youth Resources • BlackBerry growth depends on youth • Why should Samsung focus on youth now? • Youth lead high-end smartphone market but operators need to change to take advantage of this opportunity 13
  • 16. Advertising Advertising Reports • Download Report Preview: Social Media, Advertising and Influence • Download Report Preview: Who or What influences youth purchase? • Download Report Preview: Winning the Hearts and Minds of Young Customers Advertising Quotes “Give them quality. That’s the best kind of advertising” – Milton Hershey Advertising is a tax on boring products – anon “It no longer makes economic sense to send an advertising message to the many in hopes of persuading the few” – Lawrence Light, CMO McDonald’s “We found advertising works the way the grass grows. You can never see it, but every week you have to mow the lawn” – Andy Tarshis, A.C.Nielsen Company “Nike didn’t discover the power of advertising, they discovered the power of their own voice” – Dan Wieden 14
  • 17. Advertising is like sex, only losers pay for it – anon Advertising Key Concepts Ad Agencies: An ad agency would much rather spend $1m creating “active” stuff. E.g. create a cool flash mob (read T-Mobile “Life is for sharing”) or throw parachute your new youth car out of a plane (read Chevvy Sonic) than talk about real world stuff like passive communication, hanging out and everyday interaction. There’s a curious anomaly in marketing today; ad agencies don’t advertise. When pressed, most will give you a number of reasons why they don’t need to from being a “business-to- business” concern to not needing to chase after clients. You wouldn’t take medical advice from a doctor who smoked, or a financial adviser who was bankrupt. Why, then, build your brand with a company that doesn’t do for themselves what they’re doing for your brand? Advertising is a tax on boring brands. Advertising is a remedy not a business strategy. Attention Economy: Youth don’t wake up thinking about your brand anymore. Advertising was born of an era when youth trust and attention were abundant. That simply isn’t true anymore. Authenticity: In the post Big-Idea era of marketing, authenticity can no longer be bought or sold, traded as a commodity by clever advertising agencies, it must be earned. More importantly, it’s a process that takes time. Agencies cling to the idea of viral video campaigns that can project a boring brand into the world of youth authenticity overnight thus bypassing the necessary groundwork and foundations that often takes years if not decades to create. Perhaps the root of the problem lies in an industry that exists on a quarterly basis, where very little space is given to projects that provide long term structure and authenticity for a brand, favoring instead short, sharp “hits” that spike youth attention only to die away until the next campaign is resurrected. Awareness: Terms like “awareness”, “top of mind” and “market share” are increasingly no more than vanity metrics for brands that insist on following them. If customers like you, be afraid, be very afraid. Because, in today’s attention economy being liked means being invisible. Content vs Context: The world isn’t as it seems, it’s as we tell it. Physical form (content) is shaped by meaning (context). Content is the product you put out in the market – what you make for them. We become easily seduced by the world of Content, the product, advertising and design agency spin. 15
  • 18. Content is the value we see. But context is the only value people feel. Context is the meaning that customers give to your product – what you make them feel. Consider that word context again. Context: from the latin “con” – to join, and “textere” – to weave fabric. Context is the fabric. Take the component threads out of the tapestry they are meaningless but as one they tell a story. Earned Media: Earned media (or free media) refers to favorable publicity gained through promotional efforts other than advertising, as opposed to paid media (PR, advertising, sponsorship etc) (source: Wikipedia). The core to youth marketing is Earned Media. Fans drive Earned Media and if you want an army of vocal Fans you need an active Frontline. This complete System is measurable through simple metrics like NPS. Advertising Statistics 39% of youth said their purchase decisions were influenced by TV ads compared to 94% who said that what their best friends had to say affect their purchase decision the most (source: The Mobile Youth Report) 70% of youth reported feeling annoyed by ads that interrupt their daily lives while 44% said that they were unlikely to buy a product after coming across an ad (source: The Mobile Youth Report) The average American youth will have seen 120,000 marketing messages by age 17 (source: Kahnemann) The human brain gates out 95% of all the information it receives at any one time (source: Graham D Brown) Advertising Resources • Can Samsung beat Apple by spending more on advertising? • Change Agents: Author Graham Brown reveals who is the real driving force of mobile innovation • The Power of the Outlier: Author Graham Brown discusses why Outsiders are key to innovation 16
  • 19. Apple Apple Reports • Download Report Preview: Generation Tablet • Download Report Preview: How can Challenger Brands Beat Samsung and Apple? • Download Report Preview: How can Samsung beat Apple? • Download Report Preview: The 15 Brands That Will Define Mobile in 2013 Apple Quotes “Look at the design of a lot of consumer products — they’re really complicated surfaces. We tried to make something much more holistic and simple. When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can often times arrive at some very elegant and simple solutions. Most people just don’t put in the time or energy to get there. We believe that customers are smart, and want objects which are well thought through.” – Steve Jobs 17
  • 20. Apple Statistics Apple iPhones account for 71% of global smartphone industry profit share despite making only 10% of global smartphone industry market share (source: The Mobile Youth Report) 75% prospective smartphone buyers intend to buy an iPhone in the future because they view the brand as prestigious (source: The Mobile Youth Report) 85% of current iPhone owners intend to purchase an iPhone when it’s time to upgrade their contract (source: The Mobile Youth Report) Apple retail revenue of $6,200 per square foot surpasses revenues from traditional retailers like Best Buy ($800) and Tiffany ($3,000) (source: The Mobile Youth Report) Apple generates 2X more buzz than Samsung in the absence of regular advertising campaigns (source: The Mobile Youth Report) Apple Resources • 5 ways to build a better smartphone experience (without changing the handset) • BlackBerry growth depends on youth • Can Samsung beat Apple by spending more on advertising? • Selling Smartphones: Youth Lead the Multi-Channel Retail Experience • The Top 3 Reasons Why Youth Buy Samsung (and why these are not enough to beat Apple) • What are Social Tools? Author Graham Brown shares a new way to look at mobile phones • Why should Samsung focus on youth now? • Youth lead high-end smartphone market but operators need to change to take advantage of this opportunity 18
  • 21. Buyer Behavior Buyer Behavior Reports • Download Report Preview: Price and Handset Purchase Decisions • Download Report Preview: Who or What influences youth purchase? Buyer Behavior Quotes “The essential difference between emotion and reason is that emotion leads to action, while reason leads to conclusions” – Donald Galne “People buy on emotion and justify with logic” – Dan Ariely Buyer Behavior Statistics 83% of youth bought their handsets based on what peers (not what ad agencies) said about the brand (source: The Mobile Youth Report) Top emotional factors that affect youth purchase decisions are status (75%), design (65%) and convenience (58%) (source: The Mobile Youth Report) 74% of youth prefer to visit a store before making a smartphone purchase to ‘try’ and ‘see’ the product (source: The Mobile Youth Report) 19
  • 22. 59% of buyers use their smartphones to check product availability and 35% check store hours before visiting a retail store (source: The Mobile Youth Report) 26% of teens who bought a smartphone for the first time got a second hand smartphone (source: The Mobile Youth Report) Buyer Behavior Key Concepts Emotion vs Logic: People buy on emotion and justify with logic. Traditional research (through surveys or online questionnaires) is often limited to appreciating only the logic of behavior e.g. “Q: Why did you buy the phone?” “A: Because of the QWERTY keyboard”. The quality of your insights is a function of the quality of your relationships. The deeper the trust and insights, the more likely people are to yield emotional answers e.g. “I bought the phone because I didn’t want to feel left out.” Similarly, If you understand why people buy cigarettes you also understand why people buy; why would anyone buy a product that killed them? Logically, cigarettes don’t make sense; cigarettes are expensive, addictive, offensive to a growing number of people and, most importantly, dangerous. We buy at the emotional layer of our subconscious based on the context of a product but when pushed to justify our behavior we’ll rationalize it as a logical action. Pink Phone Syndrome: We spend most of our lives thinking about the opposite sex but we truly understand little about their mechanics or complexities. It amazes me that the best design agencies can do when considering these vast oceans of misunderstanding the best the can come up with is the pink phone. If we look at the data we start to understand why the creative industry is so poor at understanding the needs of female customers: only 3% of the advertising industry’s creative directors are women. Only 1 of the last 85 winners of Best Director at the Academy Awards was a woman. Buyer Behavior Resources • Can Samsung beat Apple by spending more on advertising? • Change Agents: Author Graham Brown reveals who is the real driving force of mobile innovation 20
  • 23. Customer Experience Customer Experience Reports • Download Report Preview: Peer to Peer Customer Service and Loyalty • Download Report Preview: Winning the Hearts and Minds of Young Customers • Download Report Preview: Youth and Retail for Mobile Brands Customer Experience Quotes “You‘ve got to start with the customer experience and work back toward the technology – not the other way around.” – Steve Jobs “We hung out with them at malls, ate dinner with them, went shopping and clubbing with them and spent a lot of time looking in their wallets and talking about money,” – David McQuille, Group Customer Experience at OCBC Bank “Think about your device. Battery life is a challenge for most people. You shouldn’t need to carry around a charger to make it through the day. If your kid spills their drink on your tablet, the screen shouldn’t die. And when you drop your phone, it shouldn’t shatter.” – Google CEO, Larry Page 21
  • 24. “LG is continuously innovating to offer creative ways to offer a user experience that adds value to our customers. It’s the positive UX that will differentiate smartphones in 2013 and beyond, not only cutting-edge hardware specs.” – Jong-seok Park, President and CEO of LG Electronics Mobile Communications Customer Experience Statistics 56% of youth believe that a good mobile service experience depends on customer care and network quality (source: The Mobile Youth Report) 63% of youth believe that a good smartphone experience depends on device quality and customer support (source: The Mobile Youth Report) 21% of youth said that hidden fees and unexplained costs were their biggest concerns negatively affecting their mobile experience (source: The Mobile Youth Report) The top 3 factors that contribute most to customer experience are Brand Trust (65%), Customer Service (62%) and Earned Media (58%)  (source: The Mobile Youth Report) 81% of people share negative experiences with friends and family while 72% share positive experiences (source: The Mobile Youth Report) Customer Experience Key Concepts Total Cost of Ownership: The complete cost of owning a device or subscribing to a service factoring in all the monetary and non-monetary costs after the sale. For example, buying an expensive charger for the phone increases the TCO. Downloading software updates although free may also increase the TCO because they require effort and energy on the customer’s behalf. Customer Experience Resources • Selling Smartphones: Youth Lead the Multi-Channel Retail Experience • The Top 3 Reasons Why Youth Buy Samsung (and why these are not enough to beat Apple) 22
  • 25. Customer Service Customer Service Reports • Download Report Preview: Customer Service is Youth Marketing • Download Report Preview: Peer to Peer Customer Service and Loyalty Customer Service Quotes Customer service is your best marketing strategy – mobileYouth “We believe that customer service shouldn’t be just a department; it should be the entire company.” – Tony Hsieh, CEO Zappos “Companies are learning that it’s much better to offer customers a place to give direct feedback at their virtual doorstep than to ignore complaints and let them crop up everywhere” – Reich & Solomon, Media Rules “The goal as a company is to have customer service that is not just the best but legendary.” – Sam Walton “But, the thing is, since I always had my own little shop and direct access to the public, I’ve been able to build up a technique without marketing people ever telling me what the public wants.” – Vivienne Westwood 23
  • 26. “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos, CEO Amazon.com “Customer service is just a day in, day out ongoing, never ending, unremitting, persevering, compassionate, type of activity. ” – Leon Gorman, CEO L.L.Bean Customer Service Statistics 45% young customers abandon a brand because of poor customer service (source: The Mobile Youth Report) 66% of customers switched a service because of poor customer service (source: Accenture) 71% of youth seek non-traditional avenues to customer service before trying the call center (source: The Mobile Youth Report) 75% of brand interaction is customer service (source: The Mobile Youth Report) 81% of customers consult peers to solve smartphone issues (source: The Mobile Youth Report) Effective peer-to-peer customer service increases acquisition rates (+27%), retention rates (+31%) and overall satisfaction (+33%) (source: The Mobile Youth Report) Customer Service Key Concepts Customer Experience: The 3 factors that support customer experience are trust, customer service and earned media. Trust depends on the reliability of your product. Customer service is a key touch-point accounting for 75% of all customer interactions. Earned media is the story customers tell about your brand to each other. Improve the 3 factors of customer experience to increase word of mouth and loyalty among customers. Peer-to-Peer Customer Service: Bottom-up models of customer service e.g. peer-to-peer that encourage customers to solve each other’s problems. 24
  • 27. Peer-to-peer customer service turns what is traditionally a cost to the business into a social benefit to the customer. Traditional Customer Service: Top-down models of customer service e.g. call centers that require customers to route through a centralized portal of information to solve their problems/issues. 25
  • 28. Influence Influence Reports • Download Report Preview: Fans • Download Report Preview: Metrics and Youth Marketing • Download Report Preview: Word of Mouth and Subscriber Acquisition Influence Quotes Find your Fans, the rest is mere detail – mobileYouth You can’t buy youth trust attention anymore, you have to earn it – mobileYouth “Historically, our number-one growth driver has been from repeat customers and word of mouth.” – Tony Hsieh, Zappos CEO “We have a lot of social channels that we track on Facebook and Twitter… we know what people that actually left BlackBerry to another platform think about that platform or what they think about the BlackBerry platform. There’s a lot of comments that say, “Hey, I wanna come back.” This is a target segment that our marketing approach will specifically go after.” – Thorsten Heins, Blackberry CEO 26
  • 29. “Sell to the sold” – Seth Godin “We take most of the money that we could have spent on paid advertising and instead put it back into the customer experience. Then we let the customers be our marketing.” – Tony Hsieh, Zappos CEO “Do what you do so well that they will want to see it again and bring their friends.” – Walt Disney “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” – Jeff Bezos, Amazon CEO “Turn strangers into friends. Turn friends into donors. And then… do the most important job: Turn your donors into fundraisers.” – Seth Godin “We are in the maturing market and when we talk about smartphones, we have to know what our segment market is – we have to know who our audience is. We cannot be everybody’s darling, if we did, we will be swimming in a school of sharks.” – Thorsten Heins, Blackberry CEO Influence Statistics 83% of youth bought their handsets based on what peers (not what ad agencies) said about the brand (source: The Mobile Youth Report) Fans aren’t 2 or 3 times more influential than your average customer, they are up to 100x more influential than customers (source: The Mobile Youth Report) The average American youth will have seen 120,000 marketing messages by age 17 (source: Kahnemann) The human brain gates out 95% of all the information it receives at any one time (source: Graham D Brown) 70% of youth feel annoyed after watching an ad and 44% say they are unlikely to buy the product advertised (source: The Mobile Youth Report) Top influencers of youth smartphone purchase decisions are Friends (94%), Siblings(86%), Parents(70%) and Neighbors (57%) (source: The Mobile Youth Report) 27
  • 30. Influence Key Concepts Attention Economy: Youth don’t wake up thinking about your brand anymore. Advertising was born of an era when youth trust and attention were abundant. That simply isn’t true anymore. Authenticity: In the post Big-Idea era of marketing, authenticity can no longer be bought or sold, traded as a commodity by clever advertising agencies, it must be earned. More importantly, it’s a process that takes time. Agencies cling to the idea of viral video campaigns that can project a boring brand into the world of youth authenticity overnight thus bypassing the necessary groundwork and foundations that often takes years if not decades to create. Perhaps the root of the problem lies in an industry that exists on a quarterly basis, where very little space is given to projects that provide long term structure and authenticity for a brand, favoring instead short, sharp “hits” that spike youth attention only to die away until the next campaign is resurrected. Awareness: Terms like “awareness”, “top of mind” and “market share” are increasingly no more than vanity metrics for brands that insist on following them. If customers like you, be afraid, be very afraid. Because, in today’s attention economy being liked means being invisible. Beachheads: A market segment of Fans who display a high NPS score for your product or brand. Sometimes called a “hot spot” when used with brand visual heatmaps. Content vs Context: The world isn’t as it seems, it’s as we tell it. Physical form (content) is shaped by meaning (context). Content is the product you put out in the market – what you make for them. We become easily seduced by the world of Content, the product, advertising and design agency spin. Content is the value we see. But context is the only value people feel. Context is the meaning that customers give to your product – what you make them feel. Consider that word context again. Context: from the latin “con” – to join, and “textere” – to weave fabric. Context is the fabric. Take the component threads out of the tapestry they are meaningless but as one they tell a story. Democratization of Media: Every customer asks this of your marketing “where am I in this story?” In the medieval era, storytelling was confined to those who had money and like manuscripts, advertising has been the preserve of the elite. We’ve created whole industries around advertising that serve the interest of these elite patrons. We’re constantly told that 28
  • 31. “customers don’t know” and, therefore, it’s the prerogative of the priesthood (agencies) to tell us what we do really want in our lives. But customers today don’t have to wait to be picked, now they’re becoming celebrities and experts by picking themselves, a move to decentralization that is rendering the old fashioned ad agency model of marketing useless. Earned Media: Earned media (or free media) refers to favorable publicity gained through promotional efforts other than advertising, as opposed to paid media (PR, advertising, sponsorship etc) (source: Wikipedia). The core to youth marketing is Earned Media. Fans drive Earned Media and if you want an army of vocal Fans you need an active Frontline. This complete System is measurable through simple metrics like NPS. Fans: key advocates of your brand and its products. It’s Fans that customers listen to when making informed product choices. It’s Fans that encourage them to switch mobile phones. It’s Fans that give them reasons to leave a service. It’s Fans that educate them about new products. mobileYouth research found Fans weren’t simply 2 or 3 times more influential than the average customer but up to 100 times more. When advertising agencies try to take brand stories onto Facebook they still persist in telling the brand story albeit with a social twist. What they fail to realize is that it’s not who’s telling your story but whose story you’re telling that counts. Fans are the new advertising industry. Fans follow people and products not brands. The question we should be asking is not “how do we engage the fans?” but “how do we break down the walls that prevent fans from engaging us?” Fans vs Customers: If you don’t know who your Fans are, you only have customers. Focus on the 10% of the market that influences the remaining 90%, the 90% aren’t listening anwyay. Too many brand managers spend their professional life trying to get customers to like them when all along they ignored the fans who already loved the brand. Liked vs Loved: If your customers like you, be afraid, be very afraid. If youth “like” you, you might as well be invisible. Net Promoter Score: a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”.NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent. (source: Wikipedia). A lot of time is wasted by agencies talking 29
  • 32. about the obscure nature of “buzz” and “engagement”. Behind this rhetoric lies a fear that should we be able to measure it, we’ll discover that advertising is, in effect, pretty useless at impacting recommendation. If an agency tells you that Earned Media isn’t measurable because they’re dragging their feet, go with one that tells you it is possible. Net Promoter Score vs Net Promoter System: What counts today in the youth market is recommendation. That’s why both Apple and Zappos share a common facet to their marketing that is rooted in quantifiable metrics tied to customer recommendation. SatMetrix’s Net Promoter Score is an increasingly popular metric to measure recommendation levels for customers but it’s widely abused. Net Promoter Score is commonly used by companies as a customer satisfaction index, in effect treating it as a vanity metric. Companies like Apple use a Net Promoter System instead, feeding back information from the retail front into the HQ on a daily basis resulting in a faster customer experience improvement cycle and increasing their word of mouth marketing. Telephones vs Loudspeakers: Social Business is the telephone – connecting people. Social Business doesn’t need to tell everyone its story it simply provides a tool for people to tell theirs. We pick up the phone and say “You’ll never guess who I just saw at the train station…” Would the phone be useful if every conversation we have, had to be about the phone company? Of course not, but that’s how creative agencies behave today – finding new ways to get us to talk about them. Ad agencies and boring brands are the Loudspeaker – dominating conversations and interrupting people to get their message across, often placating the inconvenience with humor or trying to be clever. Influence Resources • Can Samsung beat Apple by spending more on advertising? • Change Agents: Author Graham Brown reveals who is the real driving force of mobile innovation • The Power of the Outlier: Author Graham Brown discusses why Outsiders are key to innovation 30
  • 33. Innovation Innovation Reports • Download Report Preview: Youth, CoCreation and Innovation Innovation Quotes The first ever recorded telecoms innovation driven by the youth market was Dengon Dial in Japan – a simple “hack” that turned fixed-line public telephone message boxes into a youth-driven dating service (more about this in the book “The Mobile Youth by Graham Brown”). The segments quickest to adopt new mobile tech aren’t mainstream execs but often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US, young female teens in Japan or young black females in South Africa. “Communications tools don’t get socially interesting until they get technologically boring.” ― Clay Shirky, Here Comes Everybody: The Power of Organizing Without Organizations “I’ve seen the demonstrations on the Internet about how you can find another person using a Zune and give them a song they can play three times. It takes forever. By the time you’ve gone through all that, the girl’s got up and left! You’re much better off to take one of your earbuds out and put it 31
  • 34. in her ear. Then you’re connected with about two feet of headphone cable.” – Steve Jobs “Look at the design of a lot of consumer products — they’re really complicated surfaces. We tried to make something much more holistic and simple. When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, and live with the problem and peel more layers of the onion off, you can often times arrive at some very elegant and simple solutions. Most people just don’t put in the time or energy to get there. We believe that customers are smart, and want objects which are well thought through.” – Steve Jobs “What are the five products you want to focus on? Get rid of the rest, because they’re dragging you down. They’re turning you into Microsoft. They’re causing you to turn out products that are adequate but not great.” – Steve Jobs Innovation Statistics 40% of innovations introduced by a manufacturer is in internal processes and 35% of innovation introduced by service firms are in organizational processes. Only 27% of innovations introduced by both contribute to marketing (source: StatFi) Flip partnered with students to identify pain points and innovate its video camera. The company went on to grab 20% video market share from Sony eventually selling its operations for $590 million (source: Cisco) 83% of hackathon attendees seeking to demo their innovative products to investors are below the age of 35 (source: tokbox) Innovation Key Concepts Co-Creation: Working with other people to find solutions to existing issues that may appear insignificant. We need to move from viewing youth as destinations for our marketing messages to treating them as partners in its production. Cognitive Surplus: “This linking together in turn lets us tap our cognitive surplus, the trillion hours a year of free time the educated population of the 32
  • 35. planet has to spend doing things they care about. In the 20th century, the bulk of that time was spent watching television, but our cognitive surplus is so enormous that diverting even a tiny fraction of time from consumption to participation can create enormous positive effects.” ― Clay Shirky Cultural Hacking: Customers changing the device or service in innocuous ways to make it better or to derive more social benefit from it. Department of Great Ideas: You don’t need a factory to produce a car anymore. If you have a laptop and a connection, you are a factory. Experts vs. Amateurs: Amateur derives from the latin “amare” – to love and “amator” – lover. When we study how innovation really happens we discover it to be an informal process, driven by those who are passionate about innovation rather than those who get paid to do it. Amateur bloggers who upstage professional journalists in covering breaking news reports are a great example. Experts by their very nature are highly trained, a learning process that encourages expertise over experience and time in the office rather than the field. Digital has changed innovation irrevocably, empowering every individual to take part in the process. Mobile banking’s future (and perhaps the future of the world’s retail banking system) doesn’t come from a design agency in Munich or San Francisco but a student in Kenya. Genchi Genbutsu: What we should be doing is practising what Toyota calls “Genchi Genbutsu” which, in Japanese, means literally “go and see for yourself”. Or, as the West corrupted the phrase, more poignantly “get your boots on”. An idea that centers on being at the frontline where interactions are happening.  Applied to youth marketing in mobile, it means a company can’t outsource its customer insights to agencies.  People in the company need to immerse themselves in youth culture. Customer service creates the Gemba culture of “getting your boots on”. Managers are “out there”, immersed into the culture and everyday behaviors of their customers. Gemba culture helped Toyota reduce the internal barriers that inhibited innovation on the manufacturing floor. Managers wouldn’t sit in comfortable offices that removed themselves from the outside world, they were active on the floor or in visiting dealerships. Toyota also built out into the youth market with its innovative Scion range by immersing itself into West Coast hip hop culture (as opposed to hiring an agency to make-over their car). By exposing the company to real world insights, customer service breaks down the walls and prevents the Kodak phenomenon of isolating yourself from the market and creating echo chambers. 33
  • 36. Hacker Way: Facebook’s “Hacker Way”, adopted as their internal modus operandus, teaches that “done is better than perfect”. It’s better to put something out there and iteratively evolve the product with user feedback and interaction than to scheme up finished products, as MySpace did, in the hope of the perfect solution. Innovation is Culture: Innovation is culture not strategy. You can no longer have an “innovation strategy” or “innovation department”, you simply have a culture that is either inhibitive or conducive to innovation. Within that culture is a key assumption – that innovation happens on the outside of the company walls and, therefore, the role of the company is to break down these walls and let innovation in. Creating social space for innovation is as important as having the right people to make it happen. London had its coffeehouses, Vienna its salons and the Valley its meetups and sushi bars. W.L.Gore founder of the all-weather Goretex company said that “communication really happens in the carpool,”  where people could feel free to talk openly without bosses around. 3M engages all its employees, not just the scientists, in its ’15 percent time’ program where they are given the freedom to chase any idea they want. The program since its inception in 1940s has resulted in 22,800 patents. Google uses a similar ’20% percent time’ program which gave rise to products like Gmail, Google Earth and Google Labs. Getting innovation right means creating the space for what people do naturally – interact. Many organizations fail to improve innovation because they try to create fake social situations that people won’t use for regular interaction (like the office slides or the brainstorming rooms). Innovation is Social: Innovation is a social process. Innovation is rarely a single disruptive step-up. In reality, silk wasn’t “discovered” by dropping the cocoon into hot tea but through many centuries of trial and error undertaken by silk farmers. Secondly, silk wasn’t discovered by one person but by many. This wasn’t the work of some genius whose stature (emperess) or intellect (Archimedes) is beyond the reach of your average mortal but by many nameless and uncelebrated individuals. People never “innovate” they simply interact with one another. If that interaction creates a better way to send a message, an idea for business or more efficient business process, it happened between two or more people and in a social context. Zuckerberg invented Facebook because he wanted to meet girls. He wasn’t the most socially gifted teen in his peer group. Teens developed SMS because the network charging models built walls rather than bridges in their communication. Wherever there is need there is innovation and there is always a need to connect. Real innovation doesn’t happen when a design agency exec sits in his office and stares out the window at blue sky all day 34
  • 37. long waiting for innovation to happen. By contrast, real innovation is a fuzzy, messy social process that involves many hands and many interactions. In contrast to the top-down world view of innovation that values expertise and big ideas, innovation is often nothing more than the constant iteration of social interaction between the experienced. Positive Deviance: The act of cultural hacking en masse by a group of customers who want to overcome a flaw in the product or a barrier than prevents them connecting with each other is called Positive Deviance (PD). PD drives innovation (e.g. with SMS). Deviance is often used in the pejorative; rule-breakers, rebels and dissidents. But it can also be essentially a positive force for change. What happens when deviance is the driving force for innovation? What happens when your customers start breaking the rules in order to produce a better product, a better way of connecting with their friends or a better way of being significant? Positive deviance is a simple solution to a day-to-day often mundane problem. These solutions are often overlooked when using a top-down approach to innovation. Positive deviance is about solving customer’s problems instead of the industry’s, and this is why it will win you customers, not awards. Innovation Resources • Can Samsung beat Apple by spending more on advertising? • Change Agents: Author Graham Brown reveals who is the real driving force of mobile innovation • The Power of the Outlier: Author Graham Brown discusses why Outsiders are key to innovation 35
  • 38. Loyalty Loyalty Reports • Download Report Preview: How can Operators Win the Youth Market? • Download Report Preview: Peer to Peer Customer Service and Loyalty • Download Report Preview: Price and Youth Loyalty Loyalty Quotes Retention is the new acquisition – mobileYouth Loyalty is a mindset not a programme – mobileYouth Youth aren’t loyal to any brand or product, they’re loyal to what that brand does for them – mobileYouth “They get it home and use it, and the joy is gone. The joy is gone every day they use it–until they’re not using it anymore! You don’t keep remembering, ‘Oh, I got a deal.’ Because you hate it!” – Tim Cook, CEO Apple 36
  • 39. Loyalty Statistics 74% of customers reported they participated in brand loyalty programs, only 12% said that it paid to be in the program. (source Colloquy) The most loyal customers with top 20% NPS scores, contribute 80% of total profits (source: The Mobile Youth Report) 60% of youth churn from mobile carrier brands because of unreliable network not rival promotions (23%) (source: The Mobile Youth Report) 26% of all customers are thinking about switching brands any given quarter (source: The Mobile Youth Report) 51% of youth who churn from mobile brands are influenced by their friends and family to make the switch (source: The Mobile Youth Report) 67% youth say they would not have switched carriers if the issue was resolved in first contact. Only 44%  say the switch would have been prevented by a loyalty reward program. (source: The Mobile Youth Report) Loyalty Key Concepts Churn Rate: (sometimes called attrition rate) in its broadest sense, is a measure of the number of individuals or items moving out of a collective over a specific period of time. It is one of two primary factors that determine the steady-state level of customers a business will support. The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base. For instance, it is an important factor for any business with a subscriber-based service model, including mobile telephone networks and pay TV operators. (source: Wikipedia) Net Promoter Score: a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”.NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent. (source: Wikipedia) 37
  • 40. Mobile Customers Mobile Customer Reports • Download Report Preview: Smartphones and Ethnic Youth • Download Report Preview: Smartphones and Teen Social Lives • Download Report Preview: Smartphones and the Female Customer • Download Report Preview: Teens and Instagram Mobile Customer Quotes “The next generation grows up thinking ‘well, of course’” – Seth Godin. “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” – Peter Drucker “Increasingly, the mass marketing is turning into a mass of niches” – Chris Anderson, The Long Tail 38
  • 41. Mobile Customer Statistics Youth spend between 15 and 30% of their disposable income on their mobile handsets (source: The Mobile Youth Report) 61% of youth sleep with their phone (source: The Mobile Youth Report) Given the choice between spending their last $10 on food and spending it on topping up their phone, 71% of youth said they would top up their phone (source: The Mobile Youth Report) 77% of mobile carrier decisions and 47% of smartphone purchase decisions are made by female members of a household (source: The Mobile Youth Report) 57% of teenage girls share a new brand they discover with friends compared to only 47% of teenage boys (source: The Mobile Youth Report) There are 1.6 billion mobile youth in the world today (aged 5-29) (source: The Mobile Youth Report). As a standalone country they’d be bigger than China. The segments quickest to adopt new mobile tech aren’t mainstream execs but often the “outliers” and “outsiders” – e.g. Hispanic immigrants in the US, young female teens in Japan or young black females in South Africa. Mobile Customers Key Concepts Addiction: Adults look at youth interaction with media and take the shortcuts in understanding. They tell us that youth are “addicted” to mobile phones because they can’t live without them. But, what this behavior fails to do is understand what they are addicted to. It isn’t the phone they’re addicted to, it’s what the phone does for them. If anything, youth are addicted to social interaction. Because, 90% of their interaction with mobile phones is passive, we don’t understand it. Because we don’t understand it, we call it an addiction. Cashless Innovators: Student change agents Change agents: Customer Beachheads who drive product innovation through cultural hacking. In mobile markets, change also comes from unexpected sources. We’ve long written about change agents in their various guises (Japanese high school girls, women in Indonesia, young 39
  • 42. black females in South Africa etc) being the polar opposite of how the established brand and their ad agency would have us think as the most innovative users. We are shown ad imagery of middle aged execs in suits (almost always male featuring supporting female) looking powerful and purposeful as he peers into his mobile phone. Yet, in reality the change agent is neither middle aged, nor male nor an executive. Digital Natives vs. Offline Immigrants: The believe that youth are addicted to technology is a myth. Young people appreciate the social benefits of technology such as getting to know someone new through Facebook but prefer to meet them in person to nurture a more meaningful relationship. Parents and teachers are key obstacles youth face in furthering their social lives. Youth are more like offline immigrants looking to create a space for themselves and their friends away from parents and teachers. Disconnected Generation: Youth today grow up without the social connectivity their forebears once had. They aren’t allowed to play out until dark, talk to strangers and their lives are significantly more structured. This means they grow up without the social contact they need, turning to technology to redress the balance. Disruptive Divas: Young female change agents, often ethnic minorities. Upwardly mobile and aspirational. Once a strong Beachhead for Blackberry. Insiders vs Outliers: Change almost always happens from the outside. When industries change, it’s the outsiders that instigate disruption. When markets change, it’s those customers who exist at the fringes who refuse to play ball. Interest Economy: It’s interesting how increasingly science and scientists are becoming sexy, particularly for girls. In the pre-digital era of the Pepsi Generation our role models and identities were defined by the teen flick and the advert where “nerds” were beaten to a pulp by jocks or publicly excoriated by the cool kids. Now, however, we exist in a pluralistic media landscape where these monolithic definitions of reality are outdated. Today, thanks to the emergence of a many-to-many economy, anyone with a voice can define what’s sexy and what’s not – and that means anyone. When Chris Anderson wrote “The Long Tail” he challenged us to rethink long held notions of economics. We started reassessing the whole idea of the “big hit” and the “top 10”. The missing link in this story is, however, the people that make the Long Tail possible. When we’re offered a Long Tail of options in every category imaginable – from music to lifestyle – our notions of behavior and identity will also change. This “Interest Economy” will unite people 40
  • 43. based on passion not geography. We’ve long talked up the digital revolution as an industry waxing lyrical about new frontiers offered by mobile and Facebook but this isn’t a technology story, it’s a human one. Myth of the Digital Native: The idea of the Digital Native has perhaps helped perpetuate a whole series of ineffective tools and strategies aimed at extending the virtual existence of this generation. Yet, what we’ve missed all along was the simple truth that their most basic need is to be offline. Youth may spent a lot of time online but their ultimate drive is to use these technologies to facilitate offline interaction. They text to hook up. They BBM to arrange times and places or exchange gossip about real world interactions at school that day. Creating virtual spaces or technologies disconnected from the real world is to build castles in the sky; unless the technology funnels down to create a better offline world, it’s simply a waste of time. Offline: According to mobileYouth data, over 50% of youth said their preferred form of communication is “face to face”. Even in this digital age, face to face is still key in the recommendation process. Mobile companies too often make the mistake of building their technologies in this online bubble. If your product doesn’t make their offline life better, you might as well flush it down the pan because it will survive only as long as you keep pumping it with expensive marketing. Youth aren’t natives who live in the online world, their existence is very much offline. Sure, they’ll use digital tools more than their older peers but the end goal of their activity is to generate offline interaction. Teenage Pirates: Teen change agents. Key to the adoption of new technologies like Facebook, Napster, Video and Messaging. Segmentation vs Articulation: Segmentation fulfils a selfish need of the business, articulation helps people tell their story. Articulation encourages fans to express themselves – hopes, needs, fears, emotions. Articulation seeks to understand the consumer as a social being living an active social life influenced by peers and family. Segmentation ignores the social lives of people and views them in isolation. Users vs People: How we view the problem is the problem. If we view mobile owners as “people” we start considering them in the social context of their daily lives – their social needs and their interactions. 41
  • 44. Mobile Data Mobile Data Reports • Download Report Preview: Mobile Video • Download Report Preview: Operators, Youth and Music Services • Download Report Preview: Teens and Instagram Mobile Data Statistics Mobile devices will account for more than 33% of all global web traffic by end of 2013 (source: The Mobile Youth Report) Smartphone mobile data traffic will grow by 81% annually till 2017 accounting for 80% of all mobile data traffic (source: The Mobile Youth Report) 49% of youth value their mobile data plans more than pay TV service (43%) and mobile voice plans (35%) (source: The Mobile Youth Report) 55% of youth prefer accessing internet on their smartphones using any available wi-fi connection over carrier supplied 3G or 4G connection (source: The Mobile Youth Report) 42
  • 45. 60% of youth access internet on their smartphones to organize a gathering with their friends (source: The Mobile Youth Report) Mobile Data Key Concepts Value Added Services: Non-voice, non-text data services such as social media, video, music and OTT messaging that allow the operators to increase ARPU. Mobile Data Resources • (New Research) Social Media Best Practices: What can mobile brands do to engage youth on social media? • Are you ready for the Peak SMS world? • Call me on Facebook? Will Facebook’s Network Effect catch the Mobile Industry out? • Is Messaging Facebook and Google’s $1 trillion giveaway? • mobileYouth Feature Sep 2012: The future of messaging • ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter, WhatsApp and Kik 43
  • 46. Mobile Messaging Mobile Messaging Reports • Download Report Preview: Mobile Messaging Mobile Messaging Quotes “Around 18 months ago we started noticing that people were using more Skype, people were using Viber and What’s App and our SMS revenues started going down. So we asked them why and it was a very simple answer. It was because it was free, so we decided to turn the model upside down.” – Vittorio Colao, CEO Vodafone Mobile Messaging Statistics Mobile operators lost $23 bn in 2012 due to the rise of mobile messaging apps (source: The Mobile Youth Report) Global mobile messaging app traffic will surpass global SMS traffic in 2014 (source: The Mobile Youth Report) 91% of young smartphone owners still rate SMS as their top messenger choice (source: The Mobile Youth Report) 44
  • 47. 80% of youth say they use messenger apps with SMS, instead of replacing SMS (source: The Mobile Youth Report) Messaging app penetration is highest among teenage girls (40%) followed by teenage boys (30%) (source: The Mobile Youth Report) Mobile Messaging Key Concepts Active vs Passive Communication: 90% of communication is passive. Just because we don’t see it or it doesn’t appear obvious doesn’t mean that it’s meaningless. Much of our social meaning is communicated through mundane behaviors. Think of it as ape-like grooming, where we sit around in large groups doing nothing particularly constructive or measurable except reinforce these peer group relationships. When parents walk into the back room and see their teen children “hanging out” with friends they are often perplexed by how unproductive this behavior is. They just sit there, hanging around listening to music. They don’t even seem to be saying much. “Hanging out” behavior is passive communication manifested on a global basis and it continues to trouble adults who fail to see its social purpose. Mobile Messaging Resources • Are you ready for the Peak SMS world? • Call me on Facebook? Will Facebook’s Network Effect catch the Mobile Industry out? • Is Messaging Facebook and Google’s $1 trillion giveaway? • mobileYouth Feature Sep 2012: The future of messaging • ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter, WhatsApp and Kik 45
  • 48. Mobile Music Mobile Music Reports • Download Report Preview: Operators, Youth and Music Services Mobile Music Statistics 44% of youth multitask while listening to music on their mobile phones when alone (source: The Mobile Youth Report) Youth spend 30 minutes a day listening to music on their mobile compared to 24 minutes browsing the web and 17 minutes playing mobile games (source: The Mobile Youth Report) Mobile music revenues from streaming and download services will account for more than 50% of mobile music revenues in 2013, ahead of ringtones and ringback tones (source: The Mobile Youth Report) 31% of 21-24 year old youth prefer to download music directly on their mobile  compared to 21% who prefer to download it to their PC (source: The Mobile Youth Report) 32% youth have paid for a music app while 18% have downloaded  free music apps (source: The Mobile Youth Report) 46
  • 49. Mobile Music Key Concepts Social Tools: People don’t buy stuff, they buy what stuff does for them. The mobile phone is a powerful social tool but not the only one available. People will always weigh up the value of a social tool in comparison to other available options (e.g. clothes, cigarettes, music, entertainment) 47
  • 50. Mobile Payments Mobile Payment Reports • Download Report Preview: Youth and Mobile Payments • Download Report Preview: Youth and Mobile Shopping Mobile Payment Quotes “We hung out with them at malls, ate dinner with them, went shopping and clubbing with them and spent a lot of time looking in their wallets and talking about money.” – David McQuille, Group Customer Experience at OCBC Bank, on creating the bank’s youth brand, FRANK Mobile Payment Statistics Mobile payments industry will amount to a trillion dollars by 2020 (source: The Mobile Youth Report) 42% of smartphone owners haven’t used a mobile payment method due to security concerns (source: The Mobile Youth Report) 48
  • 51. 88% of youth want better security in mobile payment methods but 81% of service providers push convenience as the key marketing message (source: The Mobile Youth Report) 74% youth trust PayPal to provide a the best mobile payment service followed by Amazon (72%) (source: The Mobile Youth Report) 54% youth would use a trustworthy mobile payment service during social occasions such as going out to a cafe with friends (source: The Mobile Youth Report) Mobile Payment Key Concepts Experts vs. Amateurs: Amateur derives from the latin “amare” – to love and “amator” – lover. When we study how innovation really happens we discover it to be an informal process, driven by those who are passionate about innovation rather than those who get paid to do it. Amateur bloggers who upstage professiona journalists in covering breaking news reports are a great example. Experts by their very nature are highly trained, a learning process that encourages expertise over experience and time in the office rather than the field. Digital has changed innovation irrevocably, empowering every individual to take part in the process. Mobile banking’s future (and perhaps the future of the world’s retail banking system) doesn’t come from a design agency in Munich or San Francisco but a student in Kenya. 49
  • 52. Mobile Video Mobile Video Reports • Download Report Preview: Mobile Video Mobile Video Statistics Mobile video will account for more than 50% of overall mobile internet traffic  in 2016 (source: The Mobile Youth Report) 41% of youth aged 18-24 prefer watching short video content on mobile device over their PC (33%) (source: The Mobile Youth Report) More than 50% of video watched on mobile is less than 10 minutes in length (source: The Mobile Youth Report) 14% of youth watch a video review of a product in their smartphones while shopping inside a retail store (source: The Mobile Youth Report) 62% of youth engage in mobile video chat sessions with peers during late night hours (source: The Mobile Youth Report) 77% youth use Oovoo as their primary mobile video chat app followed by Tango (62%) (source: The Mobile Youth Report) 50
  • 53. Mobile Video Key Concepts Convergence vs Divergence: The industry vision of a singular converged technology or device is becoming a pipe-dream. Youth are opting for a diverged future. Take the mobile phone as an example – one mobile phone but up to seven social tools. Youth will use different apps e.g. SMS, email, BBM, Kik, Skype and texting in parallel to achieve different social objectives. Cool vs Mundane: Technology becomes socially relevant when it is mundane, not cool. People are yet to find a socially relevant use for the latest smartphone features. Mundane features like SMS, however, are key tools that enable people’s social lives. 90% of smartphone owners rate SMS as the key messaging app despite availability of ‘cooler’ apps like WhatsApp and Facebook Messenger. Early Adopters vs Change Agents: The drivers of emerging technologies like mobile video aren’t business users conferencing with each other but teens in their bedrooms using services like ooVoo and young immigrants. With respect to the latter, it’s the Hispanics in South West USA who are the hungriest for new mobile services, not established white communities up the Atlantic coast. 51
  • 54. Operator Strategies Mobile Operator Reports • Download Report Preview: How can Operators Win the Youth Market? • Download Report Preview: Prepaid Market Overview • Download Report Preview: Price and Youth Loyalty • Download Report Preview: Youth MVNOs and sub brands Mobile Operator Quotes “If you wait until there is another case study in your industry, you will be too late” – Seth Godin Mobile Operator Statistics 6 out of 7 billion people in the world have access to a mobile phone but only 30% have access to a bank account (source: The Mobile Youth Report) 40% of youth switch mobile operators because of poor customer service, not lower prices from competitors (source: The Mobile Youth Report) 52
  • 55. Operators are missing out on 35% of youth mobile expenditure emerging from new services such as music, games, video and other mobile apps (source: The Mobile Youth Report) 21% of youth said that hidden fees and unexplained costs were their biggest concerns with mobile operators (source: The Mobile Youth Report) 56% of youth believe good mobile experience depends on customer care and network quality (source: The Mobile Youth Report) Mobile Operator Resources • Are you ready for the Peak SMS world? • BlackBerry growth depends on youth • Call me on Facebook? Will Facebook’s Network Effect catch the Mobile Industry out? • Is Messaging Facebook and Google’s $1 trillion giveaway? • mobileYouth Feature Sep 2012: The future of messaging • Why should Samsung focus on youth now? • Youth lead high-end smartphone market but operators need to change to take advantage of this opportunity • ‘I’m so over SMS’: 2013 is the year youth abandon SMS in favor of Twitter, WhatsApp and Kik 53
  • 56. Prepaid Prepaid Reports • Download Report Preview: Prepaid Market Overview • Download Report Preview: Price and Youth Loyalty • Download Report Preview: Youth MVNOs and sub brands Prepaid Statistics Prepaid subscriptions dominate emerging markets of Africa (96%),  Asia (85%) and Latin America (66%) (source: The Mobile Youth Report) 91% of smartphone growth in 2012 came from prepaid subscribers (source: The Mobile Youth Report) Youth on prepaid accounts stay with a carrier for an average of 22 months – similar time period as a post-paid connection (source: The Mobile Youth Report) 65% youth prefer prepaid connections because they believe it’s a fair relationship between the brand and customer (source: The Mobile Youth Report) 54
  • 57. Youth on prepaid accounts spent most of their time browsing the internet (25 min per day), checking social networks(17 min per day) and using instant messenger apps (16 min per day) (source: The Mobile Youth Report) 55
  • 58. Pricing Pricing Reports • Download Report Preview: Prepaid Market Overview • Download Report Preview: Price and Handset Purchase Decisions • Download Report Preview: Price and Youth Loyalty Pricing Statistics Youth prioritize safety features like warranty (78%) and durability (66%) over price (42%) when making a smartphone purchase decision (source: The Mobile Youth Report) 56% of marketers believe youth abandon brands because of cheaper options from rival brands but only 29% of youth agree that they have abandoned a brand due to cheaper prices elsewhere (source: The Mobile Youth Report) 96% youth say price is a key determinant of purchase decision when buying a secondary handset i.e. a feature phone that acts as a backup for the primary smartphone (source: The Mobile Youth Report) 56
  • 59. Youth spend 36% of their monthly budget on mobile and weight increasing mobile expenses against social experiences like going to a restaurant with friends (20%) and shopping with friends (32%) (source: The Mobile Youth Report) Operators like Safaricom in Kenya and Verizon Wireless in the US have historically had lower churn compared to rival carriers despite higher prices (source: The Mobile Youth Report) 57
  • 60. Retail Retail Reports • Download Report Preview: Youth and Mobile Payments • Download Report Preview: Youth and Mobile Shopping • Download Report Preview: Youth and Retail for Mobile Brands Retail Quotes “We want interactions with Optus to exceed expectations and the feedback, both good and bad, from our pilot stores will be invaluable in helping us shape the experience for the rest of the transformation” – Rohan Ganeson, MD of retail sales at Optus “I worked for Apple Retail for a couple of years in college. During my time there they had implemented the net promoter system, and I truly loved it. Unfortunately I can’t give an NPS opinion from a management perspective, but from an employee’s perspective, it helped motivate me to do my best every day because anyone could be a detractor. It was also great when, during meetings, our management team compiled the NPS feedback and we got to hear verbatim what our customers thought of our service.” Cat Kobe – ex Apple Genius employee 58
  • 61. “Our mission was to build a place to enrich the lives of customers…a place to gather, to learn and to experience” – Ron Johnson, founder Apple Retail “Every sofa, bus, train is a shop front as people are looking at their phones.” – Andrew Harrison, CEO Carphone Warehouse “But, the thing is, since I always had my own little shop and direct access to the public, I’ve been able to build up a technique without marketing people ever telling me what the public wants.” – Vivienne Westwood “Led by mobile, a commerce revolution is under way. Technology is creating a new web-enabled retail interface, a new seamless, multiscreen commerce experience that connects consumers anytime, anywhere. This will expand shopping beyond conventional store environments and e-commerce sites. How we shop is being transformed, and eBay Inc. intends to be a leader in this new commerce world.” – John Donahoe, eBay President and CEO “People shop and learn in a whole new way compared to just a few years ago, so marketers need to adapt or risk extinction” – Brian Halligan, Author Inbound Marketing Retail Statistics Youth spend more than $50 per trip on average compared to adults who spend $30 or more (source: The Mobile Youth Report) 73% of young women call a friend from the store to ask for their opinion while 58% of men search the web on their smartphones for more info (source: The Mobile Youth Report) 58% youth prefer to shop in a physical retail store compared to 45% who prefer online stores (source: The Mobile Youth Report) 76% of youth engaged in showrooming i.e. they visited a store to ‘look’ and ‘try’ products before buying them online (source: The Mobile Youth Report) 46% of youth use their smartphones while in a retail store to call peers fro advice followed by looking for product reviews (28%) (source: The Mobile Youth Report) 59
  • 62. Retail Key Concepts Frontline: The point at which the customer interacts with the brand (often retail). There are many forms of a Frontline: retail, events or online communities. Frontlines are a key part of a successful youth marketing strategy today because it’s at the Frontline where the brand touches the daily lives of customers and fans. 75% of customer interaction happens through customer service. That means the majority of branding occurs outside of what the creative agency does. For Apple, their Frontline is their retail stores. In 2001, Apple spent 5% of their revenues on advertising. Today they spend just under 1%. Why? Their Frontline is a far more effective brand builder than advertising could ever be. Apple’s Frontline is a key composite of their success story. When people talk about the Apple success story many cite Steve Jobs’ genius or “design thinking” but these factors are icing on the cake of a more robust system built around their Frontline. Of Apple’s 43,000 employees in the US, 30,000 work for Apple retail. Showrooming: Customers using the retail store to try out products before buying online (often with a different retailer e.g. Amazon) Retail Resources • Selling Smartphones: Youth Lead the Multi-Channel Retail Experience 60
  • 63. Samsung Samsung Reports • Download Report Preview: Generation Tablet • Download Report Preview: Handset Brands and the Youth Market • Download Report Preview: How can Samsung beat Apple? • Download Report Preview: The 15 Brands That Will Define Mobile in 2013 Samsung Quotes “For each of us, life is a journey. What you want is a device that can help us on the journey.” – JK Shin, Samsung CEO Samsung Statistics Samsung took over Nokia and Apple as the industry leader with 33% of global smartphone market share (source: The Mobile Youth Report) 89% of prospective smartphone buyers intend to purchase a Samsung Galaxy smartphone because they view it as an affordable alternative to the iPhone (source: The Mobile Youth Report) 61
  • 64. 34% of current Samsung smartphone owners intend to stick with Galaxy smartphone when its time to upgrade (source: The Mobile Youth Report) Samsung is the #1 electronic brand when youth think about buying gadgets for themselves but falls to #3 behind Apple and Sony when it comes to recommending brands to friends (source: The Mobile Youth Report) Samsung Resources • 5 ways to build a better smartphone experience (without changing the handset) • BlackBerry growth depends on youth • Can Samsung beat Apple by spending more on advertising? • Selling Smartphones: Youth Lead the Multi-Channel Retail Experience • The Top 3 Reasons Why Youth Buy Samsung (and why these are not enough to beat Apple) • What are Social Tools? Author Graham Brown shares a new way to look at mobile phones • Why should Samsung focus on youth now? • Youth lead high-end smartphone market but operators need to change to take advantage of this opportunity 62
  • 65. Smartphones Smartphone Reports • Download Report Preview: Handset Brands and the Youth Market • Download Report Preview: Price and Handset Purchase Decisions • Download Report Preview: Who or What influences youth purchase? • Download Report Preview: Winning the Hearts and Minds of Young Customers Overview Mobile is the largest spending category for the 2 billion young mobile owners around the world. Some brands focus directly on the youth market with a hope that their young customers will stick with them in adulthood. Other brands take an indirect approach and establish themselves as aspirational brands for young consumers. What approach should brands take to capture the youth market? What does the latest research tell us about the young consumer market? What role do mobile phones play in the social lives of youth? How do teens, ethnic youth and young females influence the market as a whole? 63
  • 66. Smartphone Quotes “Smartphones are reinventing the connection between companies and their customers” – Rich Miner, Co-Founder Android “Think about your device. Battery life is a challenge for most people. You shouldn’t need to carry around a charger to make it through the day. If your kid spills their drink on your tablet, the screen shouldn’t die. And when you drop your phone, it shouldn’t shatter.” – Larry Page (Google CEO) “Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs (Apple CEO) “Communications tools don’t get socially interesting until they get technologically boring.” ― Clay Shirky, Here Comes Everybody: The Power of Organizing Without Organizations “For each of us, life is a journey. What you want is a device that can help us on the journey,” JK Shin, Samsung CEO “LG is continuously innovating to offer creative ways to offer a user experience that adds value to our customers. It’s the positive UX that will differentiate smartphones in 2013 and beyond, not only cutting-edge hardware specs.” – Jong-seok Park, President and CEO of LG Electronics Mobile Communications Smartphone Statistics 83% of youth bought their handsets based on what peers (not what ad agencies) said about the brand (source: The Mobile Youth Report) Youth spend between 15 and 30% of their disposable income on their mobile handsets (source: The Mobile Youth Report) 61% of youth sleep with their phone (source: The Mobile Youth Report) Given the choice between spending their last $10 on food and spending it on topping up their phone, 71% of youth said they would top up their phone (source: The Mobile Youth Report) 64
  • 67. Smartphone Key Concepts Bring Your Own Device (BYOD): Key trend in the enterprise market. Employers allowing employees to bring their own smartphones to work rather than bulk buy corporate devices. The shift is opening the door for devices like Samsung and Apple while at the same time squeezing out Blackberry as younger employees introduce these new brands into the workplace. Form Factor: Unique size and shape of a component or device (such as a circuit board, disk drive, or power supply of a computer) that determines its fit (physical compatibility) or interchangeability with other components or devices of a system. (source Business Dictionary) Hard Factors: Physical elements of the product experience that cannot be changed by marketing (the content) e.g. design, form factor, tariffs. Pink Phone Syndrome: We spend most of our lives thinking about the opposite sex but we truly understand little about their mechanics or complexities. It amazes me that the best design agencies can do when considering these vast oceans of misunderstanding the best the can come up with is the pink phone. If we look at the data we start to understand why the creative industry is so poor at understanding the needs of female customers: only 3% of the advertising industry’s creative directors are women. Only 1 of the last 85 winners of Best Director at the Academy Awards was a woman. Smartphone: A smartphone is a mobile phone built on a mobile operating system, with more advanced computing capability connectivity than a feature phone (source: Wikipedia) Soft Factors: The non-physical elements of experience that are dependent on marketing e.g. earned media, trust. 90% of brand is shaped by soft factors. Total Cost of Ownership: The complete cost of owning a device or subscribing to a service factoring in all the monetary and non-monetary costs after the sale. For example, buying an expensive charger for the phone increases the TCO. Downloading software updates although free may also increase the TCO because they require effort and energy on the customer’s behalf. 65
  • 68. Smartphone Resources • 5 ways to build a better smartphone experience (without changing the handset) • BlackBerry growth depends on youth • Can Samsung beat Apple by spending more on advertising? • Selling Smartphones: Youth Lead the Multi-Channel Retail Experience • The Top 3 Reasons Why Youth Buy Samsung (and why these are not enough to beat Apple) • What are Social Tools? Author Graham Brown shares a new way to look at mobile phones • Why should Samsung focus on youth now? • Youth lead high-end smartphone market but operators need to change to take advantage of this opportunity 66
  • 69. Social Media Social Media Reports • Download Report Preview: Smartphones and Teen Social Lives • Download Report Preview: Social Media for Mobile Brands • Download Report Preview: Social Media, Advertising and Influence • Download Report Preview: Teens and Instagram Social Media Quotes “It’s a strange business model at present where telcos invest huge amounts of money to upgrade data networks and players like YouTube, who gets the revenue, don’t pay anything.” – Marten Pieters, Vodafone India CEO “You don’t need to control the conversation to reap the benefits” – Henry Jenkins “For a truly effective social campaign, a brand needs to embrace the first principles of marketing, which involves brand definition and consistent storytelling.” – Simon Mainwaring “Cooperating creates group identity.” ― Clay Shirky, Here Comes Everybody: The Power of Organizing Without Organizations 67
  • 70. “People share, read and generally engage more with any type of content when it’s surfaced through friends & people they know and trust” – Malorie Lucich, Facebook “We are in a world where most American citizens over the age of 12 share things with each other online.” – Clay Shirky “The key is to produce something that both pulls people together and gives them something to do” – Henry Jenkins “This linking together in turn lets us tap our cognitive surplus, the trillion hours a year of free time the educated population of the planet has to spend doing things they care about. In the 20th century, the bulk of that time was spent watching television, but our cognitive surplus is so enormous that diverting even a tiny fraction of time from consumption to participation can create enormous positive effects.” ― Clay Shirky Social Media Statistics 47% youth follow brands on social media because the brand organizes events that youth want to attend. Only 13% of young social media followers own the brand’s product. (source: The Mobile Youth Report) 67% youth interact with posts from friends compared to 42% who interact with promotion posts from brands (source: The Mobile Youth Report) Youth are more likely to interact with strangers on social media who share common interests (33%) than brands (27%) (source: The Mobile Youth Report) 50% of youth seek out brands on social media because they want a response about an issue they have (source: The Mobile Youth Report) 41% of youth trust a brand based on positive online reviews on social media while only 25% of youth say that the number of ‘likes’ is key to building trust (source: The Mobile Youth Report) Social Media Key Concepts All Media is Social: When experts talk of the changing media landscape, they often point to a transition from “traditional” media (TV, print etc) to “social media” (Facebook, Twitter etc) but this terminology is misleading. All 68
  • 71. media is social. Media (meaning “inbetween”) exists to provide a channel between people. What is now known as “traditional” media was “social” media back in 1989. “Social media”, as a term, is misleading because it infers there is “social” and “unsocial” media, the latter being everything that came before Facebook. If we accept there is an “unsocial” media we also let every media owner and advertiser off the hook for allowing their storytelling to become ineffective; there always have been “conversations”, don’t just assume it’s something the “social media” guys should be doing. Brand Democracy: Customers are the brand. It’s not who’s telling your story but whose story you’re telling Many to Many: Customers today have the tools to perform the functions business used to have control over, so why stand in their way? Not only are they more motivated, they have more experience of your product and work 24/7. When we insist on interfering with ad agencies, design agencies and call centers we turn these functions from being a social benefit into a cost center. We then set about outsourcing and reducing their scope in the name of efficiency and cost reduction. Telephony is a Many-to-Many technology. Content is neither controlled nor created. By virtue of being the platform, the provider only has to make sure the tools are working rather than constantly having to invest in creating new and engaging content for people to pay attention to. Sharing: What people share today on Facebook is little different than what they shared in the days before social media. Same behaviors, different tools. In fact, it’s nothing new. Back then we used photo albums and verbal gossip. Now, we’re simply bringing it into the 21st century. In a world of scarcity, we are driven to horde. In a world of abundance, however, we are driven to share. If your neighbor drove to your office every day, you are more likely to pool your transport. If everyone knew everyone else’s movements, the lanes of the Californian highways would see significantly less traffic. They’d have to have 2 carpool lanes and less for the single drivers. Social Media Resources • (New Research) Social Media Best Practices: What can mobile brands do to engage youth on social media? • Call me on Facebook? Will Facebook’s Network Effect catch the Mobile Industry out? 69
  • 72. Tablets Tablets Reports • Download Report Preview: Generation Tablet Tablets Quotes “Tablets will be the mother of all markets” – Tim Cook, CEO Apple “We sell the hardware at our cost, so it is break-even on the hardware. We want to make money when people use our devices, not when people buy our devices.What we find is that when people buy a Kindle they read four times as much as they did before they bought the Kindle. But they don’t stop buying paper books. Kindle owners read four times as much, but they continue to buy both types of books” – Jeff Bezos, CEO Amazon Tablets Statistics Global tablets shipment will exceed 350 million by 2017 (source: The Mobile Youth Report) 26% of people own and use PC, tablets and smartphones together instead of replacing one with another (source: The Mobile Youth Report) 70
  • 73. Tablet app revenues ($48 bn) will surpass smartphone app revenues ($44 bn) in 2018 (source: The Mobile Youth Report) 76% of parents say that children under 18 are the designated primary users of tablets in the family (source: The Mobile Youth Report) More than 1 in 10 children under the age of 4 has regular access to a tablet (source: The Mobile Youth Report) 71
  • 74. Trust Trust Reports • Download Report Preview: Customer Service is Youth Marketing • Download Report Preview: Metrics and Youth Marketing • Download Report Preview: Who or What influences youth purchase? Trust Quotes “Trust, once eroded, is very hard to restore.” ― Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions Trust Statistics 90% youth trust peer recommendation over all forms of online and traditional advertising (source: The Mobile Youth Report) 65% people believe trust in a brand emerging from the product’s reliability/ durability shapes customer experience above all other product features (source: The Mobile Youth Report) 72
  • 75. Trust Key Concepts Trust: You can’t scale trust, attention and love. All the things that factories thought of once as scarce are now abundant. Trust Resources • The Top 3 Reasons Why Youth Buy Samsung (and why these are not enough to beat Apple) 73
  • 76. Youth Branding Youth Brand Reports • Download Report Preview: Social Media for Mobile Brands • Download Report Preview: Social Media, Advertising and Influence • Download Report Preview: Youth MVNOs and sub brands • Download Report Preview: Youth, CoCreation and Innovation Youth Brand Quotes “Your culture is your brand” – Tony Hsieh, CEO Zappos “For a truly effective social campaign, a brand needs to embrace the first principles of marketing, which involves brand definition and consistent storytelling.” – Simon Mainwaring “Youth don’t wake up thinking about your brand anymore, get over it” – Graham D Brown 74
  • 77. Youth Brand Statistics 50% of youth recommend a brand because they have had a positive experience with the brand (source: The Mobile Youth Report) On average 20% of youth say that brand is important when making a smartphone purchase decision while 50% say it’s not an important factor (source: The Mobile Youth Report) 63% of smartphone owners believe that satisfaction with a smartphone brand depends on device quality and support (source: The Mobile Youth Report) 88% of all positive recommendation for a brand are generated by Fans who make up 10% of the brand’s customers (source: The Mobile Youth Report) Youth Brand Key Concepts MVNO: A mobile virtual network operator (MVNO) (or mobile other licensed operator (MOLO) in the United Kingdom) is a wireless communications services provider that does not own the radio spectrum or wireless network infrastructure over which the MVNO provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently. An MVNO may use its own customer service and billing support systems, marketing and sales personnel or it may employ the services of a Mobile Virtual Network Enabler (MVNE) (source: Wikipedia) Storytelling: The first hand prints of the young paleolithic girl found a cave wall from over 10,000 years ago are no different from your 2 year old daughter’s hand prints in paint at kindergarten. Our basic need to tell stories, and the Social Code that compels it, is as old as human history itself and reflected in these 1000 year old scraps of parchment. While the Social Code remains timeless, what has changed is the canvas on which we tell these stories. We tell stories to make sense of the world, its tools and products. Products are valued not by their parts and components, they are valued by the stories people tell about them. Marketing is about delivering a customer experience that is consistent with the brand promise. Youth vs Youthful: the difference between what you say and what you do about your brand. For example, advertising may promote a Youth brand 75
  • 78. where a Youthful brand (like Apple) appeals to youth without being overtly young by promoting a positive customer experience. 76
  • 79. Download this handbook for free! Go to http://www.mobileYouth.org and sign up to our newsletter